Amazon.com vs McDonald's Which Is Stronger?

Amazon.com and McDonald's are two of the biggest players in the global market, with each company holding a significant share of the market in their respective industries. Both companies have seen impressive growth in recent years, bolstered by strong financial performance and consistent revenue streams. Amazon.com, known for its dominance in e-commerce, has seen its stock price soar as consumers increasingly turn to online shopping. On the other hand, McDonald's, a household name in fast food, continues to attract customers with its iconic brand and innovative menu offerings. In this comparison, we will delve into the key factors driving the stock performance of both Amazon.com and McDonald's, analyzing their financial health, competitive positioning, and growth prospects.

Amazon.com or McDonald's?

When comparing Amazon.com and McDonald's, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Amazon.com and McDonald's.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Amazon.com has a dividend yield of -%, while McDonald's has a dividend yield of 2.81%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Amazon.com reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, McDonald's reports a 5-year dividend growth of 8.26% year and a payout ratio of 58.34%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Amazon.com P/E ratio at 45.08 and McDonald's's P/E ratio at 25.97. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Amazon.com P/B ratio is 8.68 while McDonald's's P/B ratio is -41.35.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Amazon.com has seen a 5-year revenue growth of 1.33%, while McDonald's's is 0.30%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Amazon.com's ROE at 21.82% and McDonald's's ROE at -168.78%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $209.25 for Amazon.com and $295.22 for McDonald's. Over the past year, Amazon.com's prices ranged from $139.52 to $215.08, with a yearly change of 54.16%. McDonald's's prices fluctuated between $243.53 and $317.90, with a yearly change of 30.54%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.