fast food industry - investing in stocks for fast food
So what will happen to some of our most popular fast food industry restaurants that exist in the market today? One of the most talked about fast food restaurants is of course the famous McDonald’s, but what about their competition? Their competition can include WEN which is now the Wendy’s Arby’s group and has now been combined into one company. BKC Burger King Holdings. This is of course another company that is famous in the fast food industry because they have created a massive name for their products like the Whopper. Then lastly there is YUM which is Yum Brands inc. they control various places like Pizza Hut, Taco Bell, Long John Silver’s, and A&W restaurants across the United States. All of these fast food places have potential advantages over their competition depending on the situation and what kind of risk an investor wants to take. I will discuss bellow the advantages and current market status of each one of these huge fast food companies and you can form your thoughts from there. -MCD McDonald’s McDonald’s in terms of market capital is of course the largest company in the fast food industry, as of the date of this article. The advantages MCD has are numerous thanks to the fact the have developed a name for fast food with their numerous ability to advertise and there long time introduction to the American market. The odds of MCD going broke in my opinion are almost zero due to their massive size and cheap prices. I think that in a bad economy MCD will prosper still because people can still afford the cheap prices that they have.
-WEN Wendy’s Arbys group As of the date of this article they have poor earnings in my opinion, also as of the date of this article appear to be having trouble making a net income HOWEVER the good news is, their income is rising and they may soon be making an excellent profit as two companies built into one. I actually have very high hopes for WEN because I think that their products are sound, PLUS Wendy’s still has a substantial dollar menu in a lot of areas that they can use to attract customers, whereas other fast food companies do not. -BKE Burger King Holdings This company like MCD has a large name for itself because it has been around for along time. People do like the fact that they are unique because they sell flame broiled hamburgers which have their own unique taste. Also the company appears undervalued because of a low price to earnings ratio. -YUM Yum BrandsYum brands has a lot of advantages in the sense that its brands are well known. The restaurants that it has equity in such as Taco Bell. I think that Yum brands will remain in the market for many years to come and is a relatively safe investment for value stock investing. -Conclusion on what you should invest in In conclusion of this article I think that McDonalds is the safest company to buy. The only thing I don’t like about MCD stock is it seems overvalued with a price to earnings ratio well above 10 as of the date of this article. My general rule of thumb is never buy companies with a price to earnings that high, however they do pay a reasonable dividend and their long term stability is more predictable. Burger King has had some resent profit increases with a relatively low price to earnings. I have high hopes for Burger King in the long run. Wendy’s and Arby’s appear to be having financial problems however that doesn’t mean that they won’t be successful in the long run. All in all if I had to just pick one company right now that has the greatest value I would go with Burger King, and if I were to pick one that is the safest for long term but slow growth I would go with McDonald’s.
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