McDonald's Corporation (MCD) vs Yum! Brands, Inc. (YUM)

McDonald's Corporation and Yum! Brands, Inc. are both Restaurants companies. McDonald's Corporation is the larger, with a market value of $168.6B against $37.8B — 4.5× the size. Yum! Brands, Inc. trades at the lower P/E: 17.3× against 19.2×. Yum! Brands, Inc. grew revenue faster over the last twelve months: 10.3% against 6.30%. McDonald's Corporation has the higher net margin (31.7% vs 25.4%) and the lower return on invested capital (21.1% vs 37.6%). Both pay a dividend; McDonald's Corporation yields more (2.31% vs 2.05%). Across the 22 metrics below, McDonald's Corporation leads on 11 and Yum! Brands, Inc. on 11.

Valuation

Metric MCD YUM Restaurants median
P/E 19.21 17.33 22.14
P/S 6.05 4.37 0.91
P/B n/m n/m 2.01
Price to free cash flow 21.15 22.71 19.41
EV/EBITDA 13.84 16.91 11.48
EV/Sales 7.53 5.70 1.20
Earnings yield 5.21% 5.77% 2.30%
Free cash flow yield 4.73% 4.40% 3.92%

Profitability

Metric MCD YUM Restaurants median
Gross margin 57.38% 68.13% 38.77%
Operating margin 46.22% 31.01% 4.30%
Net margin 31.72% 25.42% 1.85%
Free cash flow margin 28.63% 19.25% 3.12%
Return on equity (464.67%) (29.99%) 3.07%
Return on assets 14.71% 28.42% 1.50%
Return on invested capital 21.05% 37.62% 3.14%

Growth

Metric MCD YUM Restaurants median
Revenue growth (TTM) 6.30% 10.29% 5.16%
EPS growth (last fiscal year) 4.92% 6.32% —
Revenue growth, 5-year CAGR 6.96% 7.76% 10.57%
Net income growth, 5-year CAGR 12.60% 11.52% 0.00%

Health

Metric MCD YUM Restaurants median
Debt to equity (38.97) (1.73) 0.10
Current ratio 1.08 0.59 0.81
Net debt to EBITDA 2.69 4.03 0.43

Dividend

Metric MCD YUM Restaurants median
Dividend yield 2.31% 2.05% 2.32%
Payout ratio 0.55 0.47 0.00

Size

Metric MCD YUM Restaurants median
Market cap 168.57b 37.80b 482.66m

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