McDonald's vs Domino's Pizza

McDonald's and Domino's Pizza are two well-known fast food chains with a global presence. Both companies have been popular choices for investors, with their stocks often seen as stable and profitable investments. McDonald's has a long history of success and a strong brand reputation, while Domino's Pizza has shown impressive growth in recent years due to its focus on delivery and digital innovation. Investors may find it interesting to compare the performance of these two iconic food industry giants.

McDonald's or Domino's Pizza?

When comparing McDonald's and Domino's Pizza, 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 Domino's Pizza.

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 Domino's Pizza has a dividend yield of 1.7%. 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, Domino's Pizza reports a 5-year dividend growth of 17.08% year and a payout ratio of 22.65%.

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 Domino's Pizza's P/E ratio at 17.76. 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 Domino's Pizza's P/B ratio is -3.75.

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 Domino's Pizza's is 0.56%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with McDonald's's ROE at -172.90% and Domino's Pizza's ROE at -21.07%.

Retail Investors:

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