McDonald’s Corporation (NYSE: MCD) is one of 22 public companies in the “Quick Service Restaurants” industry, but how does it weigh in compared to its peers? We will compare McDonald’s Corporation to similar businesses based on the strength of its profitability, analyst recommendations, institutional ownership, earnings, dividends, valuation and risk.
Volatility & Risk
McDonald’s Corporation has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500. Comparatively, McDonald’s Corporation’s peers have a beta of 0.53, suggesting that their average stock price is 47% less volatile than the S&P 500.
This is a summary of current ratings and target prices for McDonald’s Corporation and its peers, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|McDonald’s Corporation Competitors||242||1335||1648||81||2.47|
McDonald’s Corporation currently has a consensus price target of $166.48, indicating a potential upside of 3.67%. As a group, “Quick Service Restaurants” companies have a potential upside of 7.78%. Given McDonald’s Corporation’s peers higher probable upside, analysts plainly believe McDonald’s Corporation has less favorable growth aspects than its peers.
Valuation and Earnings
This table compares McDonald’s Corporation and its peers revenue, earnings per share (EPS) and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|McDonald’s Corporation||$24.18 billion||$9.60 billion||26.28|
|McDonald’s Corporation Competitors||$3.06 billion||$846.52 million||29.86|
McDonald’s Corporation has higher revenue and earnings than its peers. McDonald’s Corporation is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.
This table compares McDonald’s Corporation and its peers’ 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%|
McDonald’s Corporation pays an annual dividend of $3.76 per share and has a dividend yield of 2.3%. 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 increased its dividend for 40 consecutive years.
Insider & Institutional Ownership
67.9% of McDonald’s Corporation shares are owned by institutional investors. Comparatively, 79.8% of shares of all “Quick Service Restaurants” companies are owned by institutional investors. 0.2% of McDonald’s Corporation shares are owned by company insiders. Comparatively, 16.3% of shares of all “Quick Service Restaurants” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
McDonald’s Corporation beats its peers on 8 of the 15 factors compared.
McDonald’s Corporation Company Profile
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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