McDonald's vs KFC Which Is Stronger?

Investors looking to add fast-food stocks to their portfolio often consider McDonald's and KFC due to their global presence and customer loyalty. McDonald's, known for its iconic golden arches, has a strong dividend history and steady growth. On the other hand, KFC, a subsidiary of Yum! Brands, has seen rapid expansion in emerging markets. Both companies face competition from health-conscious consumers and changing market trends. Understanding the differences between McDonald's and KFC stocks can help investors make informed decisions.

McDonald's or KFC?

When comparing McDonald's and KFC, 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 KFC.

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 2.29%, while KFC has a dividend yield of 4.78%. 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 58.34%. On the other hand, KFC reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

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 25.78 and KFC's P/E ratio at 9.86. 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 -41.06 while KFC's P/B ratio is 0.46.

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 KFC's is 0.02%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with McDonald's's ROE at -168.78% and KFC's ROE at 4.62%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $295.75 for McDonald's and ¥1241.00 for KFC. Over the past year, McDonald's's prices ranged from $243.53 to $317.90, with a yearly change of 30.54%. KFC's prices fluctuated between ¥1176.00 and ¥1606.00, with a yearly change of 36.56%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.