Pizza Pizza Royalty (OTCMKTS:PZRIF – Get Free Report) and McDonald’s (NYSE:MCD – Get Free Report) are both consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, valuation, profitability and risk.
Insider & Institutional Ownership
35.5% of Pizza Pizza Royalty shares are owned by institutional investors. Comparatively, 70.3% of McDonald’s shares are owned by institutional investors. 0.3% of McDonald’s shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Analyst Ratings
This is a summary of recent ratings and target prices for Pizza Pizza Royalty and McDonald’s, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Pizza Pizza Royalty | 0 | 1 | 0 | 0 | 2.00 |
| McDonald’s | 0 | 11 | 15 | 1 | 2.63 |
Profitability
This table compares Pizza Pizza Royalty and McDonald’s’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Pizza Pizza Royalty | N/A | N/A | N/A |
| McDonald’s | 31.72% | -572.06% | 14.92% |
Valuation & Earnings
This table compares Pizza Pizza Royalty and McDonald’s”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Pizza Pizza Royalty | N/A | N/A | N/A | $0.81 | 11.15 |
| McDonald’s | $26.89 billion | 6.98 | $8.56 billion | $12.31 | 21.53 |
McDonald’s has higher revenue and earnings than Pizza Pizza Royalty. Pizza Pizza Royalty is trading at a lower price-to-earnings ratio than McDonald’s, indicating that it is currently the more affordable of the two stocks.
Dividends
Pizza Pizza Royalty pays an annual dividend of $0.79 per share and has a dividend yield of 8.8%. McDonald’s pays an annual dividend of $7.44 per share and has a dividend yield of 2.8%. Pizza Pizza Royalty pays out 97.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. McDonald’s pays out 60.4% of its earnings in the form of a dividend. McDonald’s has increased its dividend for 49 consecutive years.
Summary
McDonald’s beats Pizza Pizza Royalty on 13 of the 15 factors compared between the two stocks.
About Pizza Pizza Royalty
Pizza Pizza Royalty Corp., through its subsidiary, Pizza Pizza Royalty Limited Partnership, owns and franchises quick service restaurants under the Pizza Pizza and Pizza 73 brands in Canada. The company was founded in 1967 and is headquartered in Toronto, Canada.
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.
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