Critical Survey: TH International (NASDAQ:THCH) & McDonald’s (NYSE:MCD)

TH International (NASDAQ:THCH) 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 profitability, dividends, valuation, institutional ownership, analyst recommendations, earnings and risk.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TH International	$1.12 billion	0.09	-$110.36 million	($0.84)	-2.87
McDonald’s	$23.18 billion	8.83	$6.18 billion	$10.87	25.85

McDonald’s has higher revenue and earnings than TH International. TH International 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 recent ratings for TH International and McDonald’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TH International	0	0	0	0	N/A
McDonald’s	0	7	22	0	2.76

McDonald’s has a consensus price target of $320.55, indicating a potential upside of 14.10%. Given McDonald’s’ higher possible upside, analysts clearly believe McDonald’s is more favorable than TH International.

Profitability

This table compares TH International and McDonald’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TH International	N/A	-215.12%	-9.62%
McDonald’s	33.06%	-139.57%	16.18%

Insider and Institutional Ownership

52.0% of TH International shares are held by institutional investors. Comparatively, 67.6% of McDonald’s shares are held by institutional investors. 0.2% of McDonald’s shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk & Volatility

TH International has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500. Comparatively, McDonald’s has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500.

Summary

McDonald’s beats TH International on 13 of the 13 factors compared between the two stocks.

About TH International

TH International Limited operates Tim Hortons coffee shops in mainland China, Hong Kong, and Macau. The company is based in Shanghai, the People's Republic of China. TH International Limited is a subsidiary of Tim Hortons Inc.

About McDonald’s

McDonald's Corporation operates and franchises McDonald's restaurants in the United States and internationally. The company's restaurants offer hamburgers and cheeseburgers, chicken sandwiches and nuggets, fries, salads, shakes, frozen desserts, sundaes, soft serve cones, bakery items, soft drinks, coffee, and beverages and other beverages, as well as breakfast menu, including muffins, Sausages, biscuit and bagel sandwiches, oatmeal, hash browns, breakfast burritos and hotcakes. McDonald's Corporation was founded in 1940 and is headquartered in Chicago, Illinois.