McDonald's (MCD)

It is all about the two C's: coffee and convenience. Nothing that has happened since then could lead anyone to think that things are due to change anytime soon. Is McDonald's going to become less convenient anytime soon? No. What are they going to do? Expand the coffee offerings. That can only lead to more interested people choosing to get their fix from Ronald & Crew at convenient locations at value prices.

Some experts have used the word recession to describe today's macroeconomic environment, but as companies report their 2008 Q1 earnings it seems that only some have succumbed to the aftershocks of the financial industry's meltdown. One firm that stands unafraid is McDonald's (NYSE:MCD) - its sales grew 24% in the first quarter.

McDonald's says it can avoid the slowdown that has affected casual & upscale restaurant managers like Brinker International (NYSE:EAT) and Darden Restaurants (NYSE:DRI). As consumers trim their budgets to cut out discretionary items, while spending more on gas and groceries, restaurants seat fewer customers. But cooking can be a burden after a long day, and the McDonald's menu, priced at a dollar and up, seems more attractive when times are tough.

But it's not all good for Mickey D's - while Q1 had rising earnings overall, same-store sales growth in the U.S.A. fell almost a percentage point in March, the first time that's happened in five years. But as foreign markets keep Ronald rolling - and weakness in the dollar boosts international returns further - a percentage point dip domestically won't look so bad when compared to competitors' numbers. So as its peers in the restaurant business struggle, McDonald's should keep its investors smiling.

Long before gas prices eclipsed $4 a gallon, before food costs rocketed, before the housing and credit crises that sent the economic dominoes falling, McDonald’s had been decades-deep in its commitment to global expansion.

Not just expansion, but also adaptation. For example, McDonald’s menu at its India stores serves more vegetarian than carnivorous fare.

In neighboring China, McDonald’s has been selected as the Official Restaurant of the Beijing 2008 Olympic Games - an honor that will bolster its global reputation further.

And it needs all it can get in Asia, because even though McDonald’s is internationally known, it is facing serious competition from Yum! Brands Inc. (YUM), owner of Kentucky Fried Chicken, Taco Bell, Long John Silver’s and Pizza Hut.

McDonald’s is the biggest fast-food restaurant chain the world. Despite bad publicity against the health risks associated with their products, and despite having some of the cheapest prices for food anywhere, McDonalds has proven to be an extremely profitable business, even in a slowing economy.

We see that in the month of February, McDonald’s sales have risen about 12%. This is a great indicator for a defensive play for the upcoming months as more economic gloom hits the news. If people are losing their jobs, or have to cut back on their “fancy” meals, you can bet that McDonalds will see increasing sales in the upcoming quarters. However, because markets are in extreme turmoil right now, investors will be looking to companies like McDonalds who see sales & profits rise during a recession.