McDonald's (MCD) Competitors

McDonald's (NYSE:MCD) and Starbucks (NASDAQ:SBUX) are both large-cap retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends, media sentiment and institutional ownership.

Which has more volatility & risk, MCD or SBUX?

McDonald's has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, Starbucks has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.

Is MCD or SBUX a better dividend stock?

McDonald's pays an annual dividend of $7.08 per share and has a dividend yield of 2.4%. Starbucks pays an annual dividend of $2.44 per share and has a dividend yield of 2.6%. McDonald's pays out 62.5% of its earnings in the form of a dividend. Starbucks pays out 88.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. McDonald's has increased its dividend for 49 consecutive years and Starbucks has increased its dividend for 15 consecutive years.

Do analysts prefer MCD or SBUX?

McDonald's currently has a consensus target price of $321.79, indicating a potential upside of 10.23%. Starbucks has a consensus target price of $98.76, indicating a potential upside of 7.22%. Given McDonald's' higher possible upside, equities research analysts clearly believe McDonald's is more favorable than Starbucks.

Company	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
McDonald's	1 Sell rating(s)	15 Hold rating(s)	13 Buy rating(s)	0 Strong Buy rating(s)	2.41
Starbucks	2 Sell rating(s)	12 Hold rating(s)	14 Buy rating(s)	0 Strong Buy rating(s)	2.43

Which has better earnings and valuation, MCD or SBUX?

McDonald's has higher earnings, but lower revenue 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.

Company	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
McDonald's	$25.92B	8.05	$8.22B	$11.33	25.77
Starbucks	$36.18B	2.89	$3.76B	$2.76	33.37

Is MCD or SBUX more profitable?

McDonald's has a net margin of 31.75% compared to Starbucks' net margin of 8.61%. Starbucks' return on equity of -42.14% beat McDonald's' return on equity.

Company	Net Margins	Return on Equity	Return on Assets
McDonald's	31.75%	-195.27%	15.21%
Starbucks	8.61%	-42.14%	10.27%

Does the media prefer MCD or SBUX?

In the previous week, McDonald's had 31 more articles in the media than Starbucks. MarketBeat recorded 109 mentions for McDonald's and 78 mentions for Starbucks. Starbucks' average media sentiment score of 0.83 beat McDonald's' score of 0.76 indicating that Starbucks is being referred to more favorably in the news media.

Company	Very Positive	Positive	Neutral	Negative	Very Negative	Overall Sentiment
McDonald's	63 Very Positive mention(s)	4 Positive mention(s)	18 Neutral mention(s)	16 Negative mention(s)	7 Very Negative mention(s)	Positive
Starbucks	38 Very Positive mention(s)	12 Positive mention(s)	16 Neutral mention(s)	7 Negative mention(s)	2 Very Negative mention(s)	Positive

Do insiders & institutionals believe in MCD or SBUX?

70.3% of McDonald's shares are owned by institutional investors. Comparatively, 72.3% of Starbucks shares are owned by institutional investors. 0.3% of McDonald's shares are owned by insiders. Comparatively, 0.1% of Starbucks shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

McDonald's beats Starbucks on 10 of the 19 factors compared between the two stocks.