Comparing Fiesta Restaurant Group (FRGI) and Mcdonald’s (MCD)

Fiesta Restaurant Group (NASDAQ:FRGI) and Mcdonald’s (NYSE:MCD) are both retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, dividends, valuation and earnings.

Analyst Recommendations

This is a summary of recent ratings for Fiesta Restaurant Group and Mcdonald’s, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fiesta Restaurant Group 0 1 2 0 2.67
Mcdonald’s 0 6 20 0 2.77

Fiesta Restaurant Group presently has a consensus target price of $29.00, suggesting a potential downside of 0.34%. Mcdonald’s has a consensus target price of $182.29, suggesting a potential upside of 8.66%. Given Mcdonald’s’ stronger consensus rating and higher possible upside, analysts plainly believe Mcdonald’s is more favorable than Fiesta Restaurant Group.

Insider & Institutional Ownership

99.1% of Fiesta Restaurant Group shares are owned by institutional investors. Comparatively, 67.0% of Mcdonald’s shares are owned by institutional investors. 1.7% of Fiesta Restaurant Group shares are owned by company insiders. Comparatively, 0.2% of Mcdonald’s shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Fiesta Restaurant Group and Mcdonald’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fiesta Restaurant Group -0.80% 5.35% 3.04%
Mcdonald’s 25.26% -133.89% 17.46%

Volatility and Risk

Fiesta Restaurant Group has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500. Comparatively, Mcdonald’s has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500.

Dividends

Mcdonald’s pays an annual dividend of $4.04 per share and has a dividend yield of 2.4%. Fiesta Restaurant Group does not pay a dividend. Mcdonald’s pays out 60.7% of its earnings in the form of a dividend. Mcdonald’s has raised its dividend for 41 consecutive years.

Earnings & Valuation

This table compares Fiesta Restaurant Group and Mcdonald’s’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fiesta Restaurant Group $669.13 million 1.19 -$36.23 million $0.60 48.50
Mcdonald’s $22.82 billion 5.70 $5.19 billion $6.66 25.19

Mcdonald’s has higher revenue and earnings than Fiesta Restaurant Group. Mcdonald’s is trading at a lower price-to-earnings ratio than Fiesta Restaurant Group, indicating that it is currently the more affordable of the two stocks.

Summary

Mcdonald’s beats Fiesta Restaurant Group on 12 of the 17 factors compared between the two stocks.

About Fiesta Restaurant Group

Fiesta Restaurant Group, Inc., through its subsidiaries, owns, operates, and franchises fast-casual restaurants. It operates its fast-casual restaurants under the Pollo Tropical and Taco Cabana brands. The company's Pollo Tropical restaurants offer citrus marinated, fire-grilled chicken, and other freshly prepared tropical inspired menu items; and Taco Cabana restaurants provide Mexican inspired food made fresh by hand. As of December 31, 2017, it had 146 company owned Pollo Tropical restaurants, which include 137 in Florida and 9 in Atlanta, Georgia; 166 company owned Taco Cabana restaurants; and franchised 31 Pollo Tropical restaurants in Puerto Rico, Panama, Guyana, Bahamas, Venezuela, and Florida, as well as 7 franchised Taco Cabana restaurants in New Mexico and Texas. The company was incorporated in 2011 and is headquartered in Dallas, Texas.

About Mcdonald’s

McDonald's Corporation operates and franchises McDonald's restaurants in the United States and internationally. Its restaurants offer various food products, soft drinks, coffee, and other beverages, as well as breakfast menu. As of December 31, 2017, the company operated 37,241 restaurants, including 34,108 franchised restaurants comprising 21,366 franchised to conventional franchisees, 6,945 licensed to developmental licensees, and 5,797 licensed to foreign affiliates; and 3,133 company-operated restaurants. McDonald's Corporation was founded in 1940 and is headquartered in Chicago, Illinois.

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