Financial Comparison: Lucky Strike Entertainment (NYSE:LUCK) & McDonald’s (NYSE:MCD)

McDonald’s (NYSE:MCD) and Lucky Strike Entertainment (NYSE:LUCK) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Dividends

McDonald’s pays an annual dividend of $7.44 per share and has a dividend yield of 2.8%. Lucky Strike Entertainment pays an annual dividend of $0.24 per share and has a dividend yield of 3.9%. McDonald’s pays out 60.4% of its earnings in the form of a dividend. Lucky Strike Entertainment pays out -70.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. McDonald’s has increased its dividend for 49 consecutive years. Lucky Strike Entertainment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

McDonald’s has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500. Comparatively, Lucky Strike Entertainment has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500.

Profitability

This table compares McDonald’s and Lucky Strike Entertainment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
McDonald’s	31.72%	-572.06%	14.92%
Lucky Strike Entertainment	-2.87%	N/A	-1.05%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for McDonald’s and Lucky Strike Entertainment, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
McDonald’s	0	11	15	1	2.63
Lucky Strike Entertainment	2	7	4	0	2.15

McDonald’s presently has a consensus target price of $322.96, indicating a potential upside of 23.69%. Lucky Strike Entertainment has a consensus target price of $8.39, indicating a potential upside of 36.85%. Given Lucky Strike Entertainment’s higher probable upside, analysts clearly believe Lucky Strike Entertainment is more favorable than McDonald’s.

Earnings and Valuation

This table compares McDonald’s and Lucky Strike Entertainment”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
McDonald’s	$26.89 billion	6.87	$8.56 billion	$12.31	21.21
Lucky Strike Entertainment	$1.25 billion	0.67	-$35.78 million	($0.34)	-18.03

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

Insider & Institutional Ownership

70.3% of McDonald’s shares are held by institutional investors. Comparatively, 68.1% of Lucky Strike Entertainment shares are held by institutional investors. 0.3% of McDonald’s shares are held by insiders. Comparatively, 84.2% of Lucky Strike Entertainment shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

McDonald’s beats Lucky Strike Entertainment on 12 of the 18 factors compared between the two stocks.

About McDonald’s

McDonald’s Corp. engages in the operation and franchising of restaurants. It operates through the following segments: U.S., International Operated Markets, and International Developmental Licensed Markets and Corporate. The U.S. segment focuses its operations on the United States. The International Operated Markets segment consists of operations and the franchising of restaurants in Australia, Canada, France, Germany, Italy, the Netherlands, Spain, and the U.K. The International Developmental Licensed Markets and Corporate segment consists of developmental licensee and affiliate markets in the McDonald’s system. The firm’s products include Big Mac, Quarter Pounder with Cheese, Filet-O-Fish, several chicken sandwiches, Chicken McNuggets, wraps, McDonald’s Fries, salads, oatmeal, shakes, McFlurry desserts, sundaes, soft serve cones, pies, soft drinks, coffee, McCafe beverages, and other beverages. The company was founded by Raymond Albert Kroc on April 15, 1955, and is headquartered in Oak Brook, IL.

About Lucky Strike Entertainment

Lucky Strike Entertainment Corp. engages in operating bowling centers. It offers entertainment concepts with lounge seating, arcades, food and beverage offerings, and hosting and overseeing professional and non-professional bowling tournaments and related broadcasting. The company was founded by Thomas F. Shannon in 1997 and is headquartered in Mechanicsville, VA.