MCD vs. SBUX, CMG, YUM, DRI, DPZ, 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), Darden Restaurants (DRI), Domino's Pizza (DPZ), 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.
McDonald's (NYSE:MCD) and Starbucks (NASDAQ:SBUX) are both large-cap retail/wholesale companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, community ranking, institutional ownership, media sentiment, risk, valuation, earnings and dividends.
McDonald's has higher earnings, but lower revenue than Starbucks. Starbucks 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 has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, Starbucks has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.
McDonald's pays an annual dividend of $6.68 per share and has a dividend yield of 2.7%. Starbucks pays an annual dividend of $2.28 per share and has a dividend yield of 3.1%. McDonald's pays out 56.7% of its earnings in the form of a dividend. Starbucks pays out 62.8% 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.
In the previous week, McDonald's had 32 more articles in the media than Starbucks. MarketBeat recorded 85 mentions for McDonald's and 53 mentions for Starbucks. McDonald's' average media sentiment score of 0.36 beat Starbucks' score of 0.28 indicating that McDonald's is being referred to more favorably in the media.
McDonald's has a net margin of 33.36% compared to Starbucks' net margin of 11.38%. Starbucks' return on equity of -49.91% beat McDonald's' return on equity.
Starbucks received 41 more outperform votes than McDonald's when rated by MarketBeat users. Likewise, 76.56% of users gave Starbucks an outperform vote while only 71.98% of users gave McDonald's an outperform vote.
McDonald's currently has a consensus price target of $308.57, indicating a potential upside of 22.45%. Starbucks has a consensus price target of $91.71, indicating a potential upside of 23.85%. Given Starbucks' higher probable upside, analysts clearly believe Starbucks is more favorable than McDonald's.
70.3% of McDonald's shares are held by institutional investors. Comparatively, 72.3% of Starbucks shares are held by institutional investors. 0.2% of McDonald's shares are held by insiders. Comparatively, 2.0% of Starbucks shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Summary
McDonald's beats Starbucks on 11 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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