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By Jason Stipp and Jeremy Glaser | 10-24-2014 08:00 AM

Friday Five: Some Blue Chips See Red After Earnings

Where we see values and uncertainties after a mixed bag of earnings from several big names this week.

Jason Stipp: I'm Jason Stipp for Morningstar and welcome to The Friday Five, Morningstar's take on five stories in the market.

It was a big earnings week; here with the rundown is Morningstar markets editor Jeremy Glaser.

Jeremy, thanks for joining me.

Glaser: You're welcome, Jason.

Stipp: Up first was McDonald's, which disappointed investors. They are having trouble pretty much all over the world.

Glaser: McDonald's did have a disappointing quarter, and there actually were a few blue-chip companies that disappointed this week. I should mention there were some that also surprised on the upside; Caterpillar and 3M had very upbeat earnings, amongst others. So, you shouldn't look at earnings season as a negative monolith.

But McDonald's definitely stood out as showing some weakness, and some of it we expected. Particularly from Asia, they had problems with some of their Chinese poultry suppliers. So, seeing nearly a 10% decline in same-store sales in the Asia-Pacific/Middle East region shouldn't be a total shock. But the continued weakness in the United States and in Europe does remain a concern.

R.J. Hottovy, our McDonald's analyst, thinks this is a sign that their marketing efforts and their menu efforts really aren't resonating with consumers right now. McDonald's has said that they need to make an effort to turn these things around, to try to cut costs where they can, to add menu items that are going to get people back in the stores. R.J. thinks that this is a sensible plan, but it's one that could take some time to happen.

McDonald's shares have a dividend yield of around 3.5% right now, which is pretty attractive, but they are not trading at a significant discount to their fair value estimate, and they are not looking like a screaming buy right now, even with that pretty nice dividend yield.

Stipp: Not a lot of sparkle in Coke's earnings this week either, but you say investors should keep a long view on this company.

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