Financial Survey: McDonald’s (NYSE:MCD) versus Reborn Coffee (NASDAQ:REBN)

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

Valuation and Earnings

This table compares McDonald’s and Reborn Coffee”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
McDonald’s	$25.94 billion	8.04	$8.47 billion	$11.39	25.54
Reborn Coffee	$5.95 million	0.78	-$4.00 million	($1.45)	-0.87

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

Analyst Ratings

This is a summary of current recommendations and price targets for McDonald’s and Reborn Coffee, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
McDonald’s	0	11	18	0	2.62
Reborn Coffee	0	0	0	0	0.00

McDonald’s presently has a consensus target price of $320.50, suggesting a potential upside of 10.18%. Given McDonald’s’ stronger consensus rating and higher probable upside, analysts plainly believe McDonald’s is more favorable than Reborn Coffee.

Profitability

This table compares McDonald’s and Reborn Coffee’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
McDonald’s	31.79%	-175.42%	15.61%
Reborn Coffee	-67.56%	-171.86%	-40.14%

Risk and Volatility

McDonald’s has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500. Comparatively, Reborn Coffee has a beta of 2.69, meaning that its stock price is 169% more volatile than the S&P 500.

Institutional & Insider Ownership

70.3% of McDonald’s shares are owned by institutional investors. Comparatively, 1.8% of Reborn Coffee shares are owned by institutional investors. 0.2% of McDonald’s shares are owned by company insiders. Comparatively, 43.1% of Reborn Coffee 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.

Summary

McDonald’s beats Reborn Coffee on 11 of the 14 factors compared between the two stocks.

About McDonald’s

McDonald's Corporation operates and franchises restaurants under the McDonald's brand in the United States and internationally. It offers food and beverages, including hamburgers and cheeseburgers, various chicken sandwiches, fries, shakes, desserts, sundaes, cookies, pies, soft drinks, coffee, and other beverages; and full or limited breakfast, as well as sells various other products during limited-time promotions. The company owns and operates under various structures comprising conventional franchise, developmental license, or affiliate. McDonald's Corporation was founded in 1940 and is based in Chicago, Illinois.

About Reborn Coffee

Reborn Coffee, Inc., through its subsidiaries, operates and franchises retail locations, kiosks, and cafes that focus on serving specialty-roasted coffee in California. It purchases, roasts, and sells coffee, tea and other beverages, and various food items. It offers products in various form factors, such as whole bean roasted coffee bags, single-serve drip bags, and pour over packs. The company also offers its products online. Reborn Coffee, Inc. was founded in 2014 and is headquartered in Brea, California.