Financial Contrast: McDonald’s (NYSE:MCD) vs. Reborn Coffee (NASDAQ:REBN)

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

Profitability

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

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

Insider and Institutional Ownership

1.8% of Reborn Coffee shares are held by institutional investors. Comparatively, 70.3% of McDonald’s shares are held by institutional investors. 43.1% of Reborn Coffee shares are held by company insiders. Comparatively, 0.2% of McDonald’s shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Reborn Coffee	$5.95 million	0.68	-$4.00 million	($1.45)	-0.77
McDonald’s	$25.94 billion	8.22	$8.47 billion	$11.39	26.14

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.

Risk and Volatility

Reborn Coffee has a beta of 2.69, indicating that its stock price is 169% 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.

Analyst Ratings

This is a summary of current recommendations for Reborn Coffee and McDonald’s, as provided by MarketBeat.

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

McDonald’s has a consensus price target of $320.50, indicating a potential upside of 7.66%. Given McDonald’s’ stronger consensus rating and higher possible upside, analysts plainly believe McDonald’s is more favorable than Reborn Coffee.

Summary

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

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.

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.