McDonald’s Corporation (NYSE: MCD) is one of 22 public companies in the “Quick Service Restaurants” industry, but how does it contrast to its rivals? We will compare McDonald’s Corporation to related businesses based on the strength of its risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.

Insider & Institutional 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, 16.3% of shares of all “Quick Service Restaurants” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

McDonald’s Corporation has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, McDonald’s Corporation’s rivals have a beta of 0.53, suggesting that their average stock price is 47% less volatile than the S&P 500.

Valuation and Earnings

This table compares McDonald’s Corporation and its rivals top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
McDonald’s Corporation $24.18 billion $9.60 billion 25.64
McDonald’s Corporation Competitors $3.06 billion $846.52 million 29.20

McDonald’s Corporation has higher revenue and earnings than its rivals. McDonald’s Corporation is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Dividends

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 1.6% 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.

Profitability

This table compares McDonald’s Corporation and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
McDonald’s Corporation 21.00% -264.89% 16.21%
McDonald’s Corporation Competitors 6.90% 12.59% 9.54%

Analyst Recommendations

This is a breakdown of recent recommendations for McDonald’s Corporation and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
McDonald’s Corporation 0 9 22 0 2.71
McDonald’s Corporation Competitors 326 1455 1661 85 2.43

McDonald’s Corporation presently has a consensus price target of $162.16, indicating a potential upside of 3.50%. As a group, “Quick Service Restaurants” companies have a potential upside of 15.85%. Given McDonald’s Corporation’s rivals higher possible upside, analysts plainly believe McDonald’s Corporation has less favorable growth aspects than its rivals.

Summary

McDonald’s Corporation beats its rivals 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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