Domino's Pizza vs McDonald's

Domino's Pizza and McDonald's are two giants in the fast-food industry, each with a long history of success and a loyal customer base. Both companies have experienced fluctuations in their stock prices over the years, with Domino's focusing on delivery and digital innovation while McDonald's maintains a strong presence in the global market. Investors may find it challenging to decide between these two fast-food giants when considering their stocks, as both have potential for growth and profitability in the future.

Domino's Pizza or McDonald's?

When comparing Domino's Pizza 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 Domino's Pizza 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. Domino's Pizza has a dividend yield of 1.7%, while McDonald's has a dividend yield of 2.66%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Domino's Pizza reports a 5-year dividend growth of 17.08% year and a payout ratio of 22.65%. On the other hand, McDonald's reports a 5-year dividend growth of 8.26% year and a payout ratio of 56.79%.

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 Domino's Pizza P/E ratio at 17.76 and McDonald's's P/E ratio at 27.11. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Domino's Pizza P/B ratio is -3.75 while McDonald's's P/B ratio is -46.69.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Domino's Pizza has seen a 5-year revenue growth of 0.56%, while McDonald's's is 0.30%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Domino's Pizza's ROE at -21.07% and McDonald's's ROE at -172.90%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $424.60 for Domino's Pizza and $311.01 for McDonald's. Over the past year, Domino's Pizza's prices ranged from $332.13 to $542.75, with a yearly change of 63.41%. McDonald's's prices fluctuated between $243.53 and $315.36, with a yearly change of 29.50%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.