Head-To-Head Analysis: GEN Restaurant Group (NASDAQ:GENK) and McDonald’s (NYSE:MCD)

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

Earnings and Valuation

This table compares GEN Restaurant Group and McDonald’s”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GEN Restaurant Group	$181.01 million	1.18	$8.41 million	$0.17	38.24
McDonald’s	$25.49 billion	8.16	$8.47 billion	$11.39	25.50

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

Profitability

This table compares GEN Restaurant Group and McDonald’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GEN Restaurant Group	0.39%	1.83%	0.37%
McDonald’s	31.79%	-175.42%	15.61%

Volatility and Risk

GEN Restaurant Group has a beta of 1.95, indicating that its stock price is 95% more volatile than the S&P 500. Comparatively, McDonald’s has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500.

Insider and Institutional Ownership

10.2% of GEN Restaurant Group shares are owned by institutional investors. Comparatively, 70.3% of McDonald’s shares are owned by institutional investors. 61.1% of GEN Restaurant Group shares are owned by company insiders. Comparatively, 0.2% of McDonald’s shares are owned 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.

Analyst Recommendations

This is a breakdown of current recommendations for GEN Restaurant Group and McDonald’s, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GEN Restaurant Group	0	0	3	0	3.00
McDonald’s	0	9	18	0	2.67

GEN Restaurant Group currently has a consensus target price of $13.17, suggesting a potential upside of 102.56%. McDonald’s has a consensus target price of $320.87, suggesting a potential upside of 10.49%. Given GEN Restaurant Group’s stronger consensus rating and higher probable upside, research analysts clearly believe GEN Restaurant Group is more favorable than McDonald’s.

Summary

McDonald’s beats GEN Restaurant Group on 8 of the 14 factors compared between the two stocks.

About GEN Restaurant Group

GEN Restaurant Group, Inc. operates restaurants in California, Arizona, Hawaii, Nevada, Texas, New York, and Florida. It offers meats, poultry, and seafood. The company was founded in 2011 and is based in Cerritos, California.

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.