Walt Disney vs McDonald's Which Is More Attractive?

Walt Disney and McDonald's are two iconic American companies known for their global reach and strong brand recognition. Both companies have a long history of success and have been profitable investments for shareholders. In recent years, Walt Disney has seen growth in its theme parks, film studios, and streaming services, while McDonald's has continued to expand its reach in the fast-food industry. This comparison will analyze the performance of their stocks and provide insight into the investment potential of these two well-known companies.

Walt Disney or McDonald's?

When comparing Walt Disney 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 Walt Disney 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. Walt Disney has a dividend yield of 0.4%, while McDonald's has a dividend yield of 2.29%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Walt Disney reports a 5-year dividend growth of 0.00% year and a payout ratio of 27.47%. 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 Walt Disney P/E ratio at 41.35 and McDonald's's P/E ratio at 25.78. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Walt Disney P/B ratio is 2.04 while McDonald's's P/B ratio is -41.06.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Walt Disney has seen a 5-year revenue growth of 0.23%, while McDonald's's is 0.30%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Walt Disney's ROE at 4.96% 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 $113.30 for Walt Disney and $295.75 for McDonald's. Over the past year, Walt Disney's prices ranged from $83.91 to $123.74, with a yearly change of 47.47%. 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.