FATBB vs. MCD, CMG, YUM, QSR, DRI, YUMC, WING, TXRH, CAVA, and ARMK
Should you be buying FAT Brands stock or one of its competitors? The main competitors of FAT Brands include McDonald's (MCD), Chipotle Mexican Grill (CMG), Yum! Brands (YUM), Restaurant Brands International (QSR), Darden Restaurants (DRI), Yum China (YUMC), Wingstop (WING), Texas Roadhouse (TXRH), CAVA Group (CAVA), and Aramark (ARMK). These companies are all part of the "eating places" industry.
McDonald's (NYSE:MCD) and FAT Brands (NASDAQ:FATBB) are both retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, dividends, analyst recommendations, media sentiment, profitability, risk, institutional ownership, community ranking and valuation.
70.3% of McDonald's shares are held by institutional investors. 0.2% of McDonald's shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
In the previous week, McDonald's had 21 more articles in the media than FAT Brands. MarketBeat recorded 21 mentions for McDonald's and 0 mentions for FAT Brands. FAT Brands' average media sentiment score of 0.57 beat McDonald's' score of 0.00 indicating that McDonald's is being referred to more favorably in the media.
McDonald's currently has a consensus target price of $316.15, suggesting a potential upside of 24.55%. Given FAT Brands' higher probable upside, research analysts clearly believe McDonald's is more favorable than FAT Brands.
McDonald's has a net margin of 33.36% compared to McDonald's' net margin of -18.28%. McDonald's' return on equity of 0.00% beat FAT Brands' return on equity.
McDonald's has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500. Comparatively, FAT Brands has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500.
McDonald's has higher revenue and earnings than FAT Brands. FAT Brands is trading at a lower price-to-earnings ratio than McDonald's, indicating that it is currently the more affordable of the two stocks.
McDonald's received 2031 more outperform votes than FAT Brands when rated by MarketBeat users.
McDonald's pays an annual dividend of $6.68 per share and has a dividend yield of 2.6%. FAT Brands pays an annual dividend of $0.56 per share and has a dividend yield of 10.9%. McDonald's pays out 56.7% of its earnings in the form of a dividend. FAT Brands pays out -9.1% 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. FAT Brands has increased its dividend for 2 consecutive years. FAT Brands is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
McDonald's beats FAT Brands on 13 of the 18 factors compared between the two stocks.
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This chart shows the number of new MarketBeat users adding FATBB 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 NASDAQ 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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