MCD — A Recession-Proof Stock

It's no secret that these are still uncertain times and that businesses and the market are on shaky ground. That's what makes McDonald's the perfect investment right now.

MCD has weathered the storm on Wall Street amazingly well, and share prices have traded in a tight 33% range over the last 12 months. For a bit of context, this is in the same market that has caused the value of the Dow to swing 93%!

If that doesn't impress you, take a look at McDonald's trading range against the backdrop of its top competitors: Burger King (BKC) shares have fluctuated 95% and Hardee's (CKR) shares have gyrated 195%.

Clearly, MCD is a stable stock that can absorb the licks the broader market cannot. This is exactly the kind of stable ground investors are looking for and what they're buying in this market.

The second trend that's going to get this stock moving in a hurry is the U.S. dollar's dwindling strength.

McDonald's Is Benefitting From the Falling Dollar

Most of us don't pay any attention to the value of the dollar until it's time to travel abroad. But huge multinational companies like McDonald's are impacted every day by shifts in the dollar.

When it comes to understanding the dollar's impact on this company, there's really only one rule of thumb: When the dollar is strong, McDonald's is weak; when the dollar is weak, McDonald's is strong.

You see, when McDonald's sells a hamburger in Spain, the customer pays in euros. McDonald's has to then convert those euros to dollars to record the revenue. When currencies move, that can add or subtract from the bottom line.

If we take a long-term view, and factor in rising U.S. debt and uncertainty about the government's ability to repay loans, the U.S. dollar is heading down, and this will continue to work in McDonald's favor quarter after quarter.

Remember, when the U.S. dollar is weak relative to other currencies, McDonald's overseas revenue will grow.

NEXT: What Our Investing Experts Have to Say About This Recession-Proof Stock