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Place the 1/4 cup flour in a resealable plastic bag. Add meat cubes, a few at a time, shaking to coat. In a 4-quart Dutch oven, heat oil over medium-high heat. Add beef cubes, one-third at a time, to hot oil; cook and stir until beef is brown. Drain fat. Return all beef to Dutch oven. Add the 4 cups water, chopped onion, garlic and bay leaves. Stir in Worcestershire sauce, sugar, lemon juice, salt, black pepper, paprika and allspice. Bring to boiling; reduce heat. Simmer, covered, for 1 1/2 to 2 hours or until meat is nearly tender.
Add potatoes, carrots and boiling onions. Return to boiling; reduce heat. Simmer, covered, for 20 to 30 minutes more or until vegetables are tender. Remove and discard bay leaves. Using a slotted spoon, transfer meat and vegetables to a serving dish. Cover and keep warm.
For gravy, in a small bowl, combine the remaining 2 tablespoons water and 1 tablespoon flour; stir into liquid in Dutch oven. Cook and stir until thickened and bubbly. Cook and stir for 1 minute more. If desired, stir in sherry. Pour gravy over meat and vegetables. Sprinkle with parsley.