McDonald’s Corporation (NYSE: MCD) is one of 22 publicly-traded companies in the “Quick Service Restaurants” industry, but how does it contrast to its competitors? We will compare McDonald’s Corporation to related companies based on the strength of its analyst recommendations, valuation, risk, profitability, dividends, institutional ownership and earnings.
McDonald’s Corporation pays an annual dividend of $3.76 per share and has a dividend yield of 2.4%. McDonald’s Corporation pays out 61.5% of its earnings in the form of a dividend. As a group, “Quick Service Restaurants” companies pay a dividend yield of 1.5% and pay out 43.1% of their earnings in the form of a dividend. McDonald’s Corporation has raised its dividend for 40 consecutive years.
Earnings and Valuation
This table compares McDonald’s Corporation and its competitors gross revenue, earnings per share and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|McDonald’s Corporation||$24.18 billion||$9.60 billion||26.01|
|McDonald’s Corporation Competitors||$3.06 billion||$846.52 million||29.49|
McDonald’s Corporation has higher revenue and earnings than its competitors. McDonald’s Corporation is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.
Risk & Volatility
McDonald’s Corporation has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, McDonald’s Corporation’s competitors have a beta of 0.53, indicating that their average stock price is 47% less volatile than the S&P 500.
This is a breakdown of recent ratings and recommmendations for McDonald’s Corporation and its competitors, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|McDonald’s Corporation Competitors||326||1460||1668||85||2.43|
McDonald’s Corporation presently has a consensus price target of $162.16, indicating a potential upside of 2.05%. As a group, “Quick Service Restaurants” companies have a potential upside of 11.59%. Given McDonald’s Corporation’s competitors higher possible upside, analysts clearly believe McDonald’s Corporation has less favorable growth aspects than its competitors.
This table compares McDonald’s Corporation and its competitors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|McDonald’s Corporation Competitors||6.90%||12.59%||9.54%|
Institutional & Insider Ownership
67.9% of McDonald’s Corporation shares are held by institutional investors. Comparatively, 79.8% of shares of all “Quick Service Restaurants” companies are held by institutional investors. 0.2% of McDonald’s Corporation shares are held by company insiders. Comparatively, 16.8% of shares of all “Quick Service Restaurants” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
McDonald’s Corporation beats its competitors on 8 of the 15 factors compared.
About McDonald’s Corporation
McDonald’s Corporation (McDonald’s) operates and franchises McDonald’s restaurants. The Company’s restaurants serve a locally relevant menu of food and drinks sold at various price points in over 100 countries. The Company’s segments include U.S., International Lead Markets, High Growth Markets, and Foundational Markets and Corporate. The U.S. segment focuses on offering a platform for authentic ingredients that allows customers to customize their sandwiches. Its High Growth Markets segment includes its operations in markets, such as China, Italy, Korea, Poland, Russia, Spain, Switzerland, the Netherlands and related markets. The International Lead markets segment includes the Company’s operations in various markets, such as Australia, Canada, France, Germany, the United Kingdom and related markets. The Foundational markets and Corporate segment is engaged in operating restaurants and increasing convenience to customers, including through drive-thru and delivery.
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