Mcdonald’s (NYSE:MCD) and Star Buffet (OTCMKTS:STRZ) are both retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, profitability, institutional ownership and earnings.
Volatility & Risk
Mcdonald’s has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, Star Buffet has a beta of 2.28, indicating that its stock price is 128% more volatile than the S&P 500.
This is a summary of current ratings for Mcdonald’s and Star Buffet, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Mcdonald’s presently has a consensus price target of $220.93, suggesting a potential upside of 2.92%. Given Mcdonald’s’ higher possible upside, research analysts clearly believe Mcdonald’s is more favorable than Star Buffet.
Institutional & Insider Ownership
68.3% of Mcdonald’s shares are owned by institutional investors. 0.3% of Mcdonald’s shares are owned by company insiders. Comparatively, 53.6% of Star Buffet shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This table compares Mcdonald’s and Star Buffet’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares Mcdonald’s and Star Buffet’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Mcdonald’s||$21.03 billion||7.75||$5.92 billion||$7.90||27.17|
|Star Buffet||$26.04 million||N/A||-$540,000.00||N/A||N/A|
Mcdonald’s has higher revenue and earnings than Star Buffet.
Mcdonald’s pays an annual dividend of $4.64 per share and has a dividend yield of 2.2%. Star Buffet does not pay a dividend. Mcdonald’s pays out 58.7% of its earnings in the form of a dividend. Mcdonald’s has raised its dividend for 42 consecutive years.
Mcdonald’s beats Star Buffet on 9 of the 13 factors compared between the two stocks.
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, 2018, the company operated 37,855 restaurants, including 35,085 franchised restaurants comprising 21,685 franchised to conventional franchisees, 7,225 licensed to developmental licensees, and 6,175 licensed to foreign affiliates; and 2,770 company-operated restaurants. McDonald's Corporation was founded in 1940 and is based in Chicago, Illinois.
About Star Buffet
Star Buffet, Inc. owns and operates full service restaurants in the United States. As of July 19, 2018, it operated 27 restaurants in 10 states. The company operates its restaurants under the 4B's, JB's, Barnhill's Salads Buffet Desserts, Casa Bonita, and BuddyFreddys names. Star Buffet, Inc. was founded in 1997 and is based in Scottsdale, Arizona.
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