Greggs vs McDonald's Which Performs Better?

Greggs and McDonald's are both well-established fast-food chains, but their stocks have shown differing levels of performance in recent years. Greggs, known for its popular pastries and baked goods, has seen a significant increase in its stock value due to its expansion efforts and strong consumer demand. On the other hand, McDonald's, a global giant in the fast-food industry, has experienced some fluctuations in its stock price despite its steady revenue streams and market dominance. Investors interested in the food industry may find value in comparing the performance of Greggs and McDonald's stocks.

Greggs or McDonald's?

When comparing Greggs 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 Greggs 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. Greggs has a dividend yield of 2.85%, while McDonald's has a dividend yield of 2.25%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Greggs reports a 5-year dividend growth of 0.00% year and a payout ratio of 75.53%. 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 Greggs P/E ratio at 6.57 and McDonald's's P/E ratio at 26.14. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Greggs P/B ratio is 1.83 while McDonald's's P/B ratio is -41.63.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Greggs has seen a 5-year revenue growth of 4.19%, while McDonald's's is 0.30%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Greggs's ROE at 26.79% 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 $10.88 for Greggs and $295.84 for McDonald's. Over the past year, Greggs's prices ranged from $10.29 to $16.37, with a yearly change of 59.01%. 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.