McDonald's

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With shares down more than 12% this year, McDonald's ( MCD) isn't getting much love from investors right now -- but it should be. McDonald's is the standard bearer in the fast food business, with almost 34,000 locations in 119 countries. The firm has made some huge strides in improving its image, adding healthier choices and high-growth offerings like angus burgers and premium coffees to its menu. Those changes helped make McDonald's one of the few names that actually grew its business during the Great Recession.

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McDonald's has a pretty unique approach to opening new stores. While many investors don't realize it, McDonald's often owns the land underneath franchised store locations, generating bigger royalty streams from each location than rival quick service restaurant chains. That helps the firm generate substantial cash that it's historically passed onto shareholders in a big way. Currently, McDonald's pays out a Super Sized 3.53% yield.

At the end of the day, the amount of money that McDonald's stores generate acts as a positive feedback loop for MCD; with average annual sales of $2.7 million per location, franchisees will want to keep opening up McDonald's stores over other franchises simply because they're so much more lucrative to own. That abundance of locations, in turn, keeps McDonald's the dominant fast food franchise worldwide.

Despite this year's underperformance, McDonald's looks primed to keep besting the market in the long-term. The firm's latest dividend hike hits investors' accounts on Dec. 17.

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