McDonald's vs Coca-Cola

McDonald's and Coca-Cola are two well-known and established companies in the food and beverage industry, with both being household names around the world. When looking at their stocks, McDonald's has been a consistently strong performer with a focus on global expansion and innovation in its menu offerings. On the other hand, Coca-Cola has faced challenges in recent years due to the shift towards healthier beverage options. Despite this, both companies continue to be popular investment choices for investors looking for stability and long-term growth potential.

McDonald's or Coca-Cola?

When comparing McDonald's and Coca-Cola, 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 McDonald's and Coca-Cola.

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. McDonald's has a dividend yield of 2.66%, while Coca-Cola has a dividend yield of 3.41%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. McDonald's reports a 5-year dividend growth of 8.26% year and a payout ratio of 56.79%. On the other hand, Coca-Cola reports a 5-year dividend growth of 3.36% year and a payout ratio of 75.57%.

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 McDonald's P/E ratio at 27.11 and Coca-Cola's P/E ratio at 28.46. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. McDonald's P/B ratio is -46.69 while Coca-Cola's P/B ratio is 11.72.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, McDonald's has seen a 5-year revenue growth of 0.30%, while Coca-Cola's is 0.31%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with McDonald's's ROE at -172.90% and Coca-Cola's ROE at 40.74%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $311.01 for McDonald's and $70.16 for Coca-Cola. Over the past year, McDonald's's prices ranged from $243.53 to $315.36, with a yearly change of 29.50%. Coca-Cola's prices fluctuated between $53.21 and $73.53, with a yearly change of 38.19%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.