Comparing McDonald’s (NYSE:MCD) & Dutch Bros (NYSE:BROS)

McDonald’s (NYSE:MCD) and Dutch Bros (NYSE:BROS) are both retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.

Analyst Ratings

This is a breakdown of recent ratings and target prices for McDonald’s and Dutch Bros, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
McDonald’s	2	13	17	0	2.47
Dutch Bros	0	3	20	1	2.92

McDonald’s currently has a consensus target price of $339.69, suggesting a potential upside of 4.07%. Dutch Bros has a consensus target price of $76.73, suggesting a potential upside of 62.27%. Given Dutch Bros’ stronger consensus rating and higher probable upside, analysts clearly believe Dutch Bros is more favorable than McDonald’s.

Earnings and Valuation

This table compares McDonald’s and Dutch Bros”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
McDonald’s	$26.89 billion	8.62	$8.56 billion	$11.95	27.31
Dutch Bros	$1.64 billion	4.75	$79.84 million	$0.64	73.88

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

Insider and Institutional Ownership

70.3% of McDonald’s shares are held by institutional investors. Comparatively, 85.5% of Dutch Bros shares are held by institutional investors. 0.3% of McDonald’s shares are held by company insiders. Comparatively, 42.4% of Dutch Bros shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares McDonald’s and Dutch Bros’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
McDonald’s	31.85%	-343.90%	14.82%
Dutch Bros	4.87%	9.56%	2.82%

Volatility & Risk

McDonald’s has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500. Comparatively, Dutch Bros has a beta of 2.54, meaning that its stock price is 154% more volatile than the S&P 500.

Summary

Dutch Bros beats McDonald’s on 9 of the 15 factors compared between the two stocks.

About McDonald’s

McDonald’s Corp. engages in the operation and franchising of restaurants. It operates through the following segments: U.S., International Operated Markets, and International Developmental Licensed Markets and Corporate. The U.S. segment focuses its operations on the United States. The International Operated Markets segment consists of operations and the franchising of restaurants in Australia, Canada, France, Germany, Italy, the Netherlands, Spain, and the U.K. The International Developmental Licensed Markets and Corporate segment consists of developmental licensee and affiliate markets in the McDonald’s system. The firm’s products include Big Mac, Quarter Pounder with Cheese, Filet-O-Fish, several chicken sandwiches, Chicken McNuggets, wraps, McDonald’s Fries, salads, oatmeal, shakes, McFlurry desserts, sundaes, soft serve cones, pies, soft drinks, coffee, McCafe beverages, and other beverages. The company was founded by Raymond Albert Kroc on April 15, 1955, and is headquartered in Oak Brook, IL.

About Dutch Bros

Dutch Bros Inc., together with its subsidiaries, operates and franchises drive-thru shops in the United States. The company operates through Company-Operated Shops and Franchising and Other segments. It serves through company-operated shops and online channels under Dutch Bros; Dutch Bros Coffee; Dutch Bros Rebel; Dutch Bros; and Blue Rebel brands. Dutch Bros Inc. was founded in 1992 and is headquartered in Grants Pass, Oregon.