SunTrust Robinson Humphrey raised its investment rating and estimates on


(MCD) - Get McDonald's Corporation (MCD) Report

Tuesday, saying the company is "turning revenue into earnings."

The fast-food restaurant chain has had solid sales growth thus far in its third quarter, analyst Howard Penney wrote in a research note, and he raised the company to overweight from equal-weight.

Penney now expects third-quarter earnings at McDonald's will rise 13% to 43 cents a share, up from a prior estimate of 38 cents a share, on a 9% increase in sales to $4.43 billion. That would reverse four straight quarters of operating earnings declines, he said.

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The analyst believes McDonald's will earn 32 cents in the fourth quarter and $1.41 for the full year. For 2004, Penney raised his profit estimate to $1.48 a share from $1.36.

McDonald's has had strong same-store sales

in the last five months. In each of the first two months of the third quarter, comparable sales have increased more than 9%, and Penney sees this trend continuing through the end of the year.

Additionally, the analyst believes the company will double the dividend on its common stock. "This implies that the current dividend will increase by less than $300 million, taking the yield to 2%," Penney wrote.

Shares of McDonald's were recently up 26 cents, or 1.1%, at $23.89 on the

New York Stock Exchange