MCD vs. SBUX, CMG, YUM, DPZ, DRI, TXRH, WEN, EAT, CAKE, and BLMN
Should you be buying McDonald's stock or one of its competitors? The main competitors of McDonald's include Starbucks (SBUX), Chipotle Mexican Grill (CMG), Yum! Brands (YUM), Domino's Pizza (DPZ), Darden Restaurants (DRI), Texas Roadhouse (TXRH), Wendy's (WEN), Brinker International (EAT), Cheesecake Factory (CAKE), and Bloomin' Brands (BLMN). These companies are all part of the "restaurants" industry.
Starbucks (NASDAQ:SBUX) and McDonald's (NYSE:MCD) are both large-cap retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, institutional ownership, risk, media sentiment, dividends, analyst recommendations, community ranking and profitability.
72.3% of Starbucks shares are owned by institutional investors. Comparatively, 70.3% of McDonald's shares are owned by institutional investors. 2.0% of Starbucks shares are owned by insiders. Comparatively, 0.2% of McDonald's shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Starbucks received 46 more outperform votes than McDonald's when rated by MarketBeat users. Likewise, 76.72% of users gave Starbucks an outperform vote while only 71.96% of users gave McDonald's an outperform vote.
Starbucks pays an annual dividend of $2.28 per share and has a dividend yield of 2.8%. McDonald's pays an annual dividend of $6.68 per share and has a dividend yield of 2.6%. Starbucks pays out 62.8% of its earnings in the form of a dividend. McDonald's pays out 56.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Starbucks has increased its dividend for 14 consecutive years and McDonald's has increased its dividend for 48 consecutive years.
In the previous week, Starbucks and Starbucks both had 48 articles in the media. McDonald's' average media sentiment score of 0.42 beat Starbucks' score of 0.32 indicating that Starbucks is being referred to more favorably in the media.
Starbucks currently has a consensus target price of $96.43, suggesting a potential upside of 20.21%. McDonald's has a consensus target price of $315.78, suggesting a potential upside of 21.97%. Given Starbucks' stronger consensus rating and higher probable upside, analysts clearly believe McDonald's is more favorable than Starbucks.
Starbucks has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500. Comparatively, McDonald's has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500.
McDonald's has a net margin of 33.36% compared to McDonald's' net margin of 11.38%. McDonald's' return on equity of -49.91% beat Starbucks' return on equity.
McDonald's has lower revenue, but higher earnings than Starbucks. McDonald's is trading at a lower price-to-earnings ratio than Starbucks, indicating that it is currently the more affordable of the two stocks.
Summary
Starbucks and McDonald's tied by winning 10 of the 20 factors compared between the two stocks.
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This chart shows the number of new MarketBeat users adding MCD and its top 5 competitors to their watchlist. Each company is represented with a line over a 90 day period.
This chart shows the average media sentiment of NYSE and its competitors over the past 90 days as caculated by MarketBeat. The averaged score is equivalent to the following: Very Negative Sentiment <= -1.5, Negative Sentiment > -1.5 and <= -0.5, Neutral Sentiment > -0.5 and < 0.5, Positive Sentiment >= 0.5 and < 1.5, and Very Positive Sentiment >= 1.5.
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