KFC vs Starbucks Which Is a Better Investment?

KFC and Starbucks are two of the most recognizable brands in the food and beverage industry, each with a strong presence in markets around the world. Investors may be interested in comparing the performance of their stocks to determine which company offers the best return on investment. While KFC is known for its fast food offerings and drive-thru service, Starbucks is renowned for its coffee and café experience. Both companies have shown resilience and growth in their respective markets, making them attractive options for investors seeking long-term stability and potential profit.

KFC or Starbucks?

When comparing KFC and Starbucks, 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 KFC and Starbucks.

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. KFC has a dividend yield of 4.83%, while Starbucks has a dividend yield of 2.37%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. KFC reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Starbucks reports a 5-year dividend growth of 10.35% year and a payout ratio of 68.73%.

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 KFC P/E ratio at 9.87 and Starbucks's P/E ratio at 29.58. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. KFC P/B ratio is 0.45 while Starbucks's P/B ratio is -14.94.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, KFC has seen a 5-year revenue growth of 0.02%, while Starbucks's is 0.75%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with KFC's ROE at 4.62% and Starbucks's ROE at -46.35%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ¥1243.00 for KFC and $97.42 for Starbucks. Over the past year, KFC's prices ranged from ¥1176.00 to ¥1606.00, with a yearly change of 36.56%. Starbucks's prices fluctuated between $71.55 and $103.32, with a yearly change of 44.40%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.