Head to Head Comparison: GEN Restaurant Group (NASDAQ:GENK) and McDonald’s (NYSE:MCD)

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

Profitability

This table compares McDonald’s and GEN Restaurant Group’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%
GEN Restaurant Group	0.39%	1.83%	0.37%

Analyst Ratings

This is a summary of recent ratings and price targets for McDonald’s and GEN Restaurant Group, as provided by MarketBeat.

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

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

Institutional & Insider Ownership

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

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

Earnings and Valuation

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

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

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.

Summary

McDonald’s beats GEN Restaurant Group on 8 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 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.