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 stock? We will contrast the two companies based on the strength of their media sentiment, community ranking, profitability, dividends, valuation, institutional ownership, analyst recommendations, earnings and risk.
In the previous week, Starbucks had 7 more articles in the media than McDonald's. MarketBeat recorded 33 mentions for Starbucks and 26 mentions for McDonald's. McDonald's' average media sentiment score of 0.57 beat Starbucks' score of 0.52 indicating that Starbucks is being referred to more favorably in the media.
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.
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.
Starbucks currently has a consensus price target of $96.43, indicating a potential upside of 18.37%. McDonald's has a consensus price target of $316.15, indicating a potential upside of 21.26%. Given Starbucks' stronger consensus rating and higher possible upside, analysts clearly believe McDonald's is more favorable than Starbucks.
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.
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 endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Starbucks has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, McDonald's has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500.
Starbucks received 45 more outperform votes than McDonald's when rated by MarketBeat users. Likewise, 76.72% of users gave Starbucks an outperform vote while only 71.97% of users gave McDonald's an outperform vote.
Summary
Starbucks beats McDonald's on 11 of the 21 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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