Head to Head Survey: RCI Hospitality (NASDAQ:RICK) versus Mcdonald’s (NASDAQ:MCD)

RCI Hospitality (NASDAQ:RICK) and Mcdonald’s (NYSE:MCD) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and target prices for RCI Hospitality and Mcdonald’s, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RCI Hospitality 0 0 1 0 3.00
Mcdonald’s 0 6 23 0 2.79

RCI Hospitality presently has a consensus price target of $34.00, indicating a potential upside of 93.29%. Mcdonald’s has a consensus price target of $206.11, indicating a potential upside of 0.19%. Given RCI Hospitality’s stronger consensus rating and higher possible upside, research analysts clearly believe RCI Hospitality is more favorable than Mcdonald’s.

Profitability

This table compares RCI Hospitality and Mcdonald’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RCI Hospitality 8.15% 14.03% 6.69%
Mcdonald’s 28.20% -95.31% 16.61%

Insider and Institutional Ownership

47.9% of RCI Hospitality shares are held by institutional investors. Comparatively, 67.7% of Mcdonald’s shares are held by institutional investors. 7.5% of RCI Hospitality shares are held by company insiders. Comparatively, 0.3% 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 stock is poised for long-term growth.

Earnings and Valuation

This table compares RCI Hospitality and Mcdonald’s’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RCI Hospitality $165.75 million 1.03 $21.71 million $2.18 8.07
Mcdonald’s $21.03 billion 7.47 $5.92 billion $7.90 26.04

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

Dividends

RCI Hospitality pays an annual dividend of $0.12 per share and has a dividend yield of 0.7%. Mcdonald’s pays an annual dividend of $4.64 per share and has a dividend yield of 2.3%. RCI Hospitality pays out 5.5% of its earnings in the form of a dividend. Mcdonald’s pays out 58.7% 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 raised its dividend for 42 consecutive years. Mcdonald’s is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

RCI Hospitality has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500. Comparatively, Mcdonald’s has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500.

Summary

Mcdonald’s beats RCI Hospitality on 11 of the 17 factors compared between the two stocks.

About RCI Hospitality

RCI Hospitality Holdings, Inc., through its subsidiaries, engages in the hospitality and related businesses in the United States. It operates in Nightclubs, Bombshells, and Media Group segments. The company owns and/or operates upscale adult nightclubs serving primarily businessmen and professionals under the Rick's Cabaret, Jaguars Club, Tootsie's Cabaret, XTC Cabaret, Club Onyx, Hoops Cabaret and Sports Bar, Scarlett's Cabaret, Temptations Adult Cabaret, Foxy's Cabaret, Vivid Cabaret, Downtown Cabaret, Cabaret East, The Seville, Silver City Cabaret, and Kappa Men's Club. It also operates restaurants and sports bars under the Bombshells Restaurant & Bar brand; and dance clubs under the Studio 80 brand. As of February 11, 2019, the company operated 46 units, including 39 nightclub units and 7 Bombshell units. In addition, it owns two national industry trade publications serving the adult nightclubs industry and the adult retail products industry; a national industry convention and tradeshow; and two national industry award shows, as well as approximately a dozen industry and social media Websites. The company was formerly known as Rick's Cabaret International, Inc. and changed its name to RCI Hospitality Holdings, Inc. in August 2014. RCI Hospitality Holdings, Inc. was founded in 1983 and is based in Houston, Texas.

About Mcdonald’s

McDonald's Corporation operates and franchises McDonald's restaurants in the United States and internationally. Its restaurants offer various food products, soft drinks, coffee, and other beverages, as well as breakfast menu. As of December 31, 2018, the company operated 37,855 restaurants, including 35,085 franchised restaurants comprising 21,685 franchised to conventional franchisees, 7,225 licensed to developmental licensees, and 6,175 licensed to foreign affiliates; and 2,770 company-operated restaurants. McDonald's Corporation was founded in 1940 and is based in Chicago, Illinois.

Receive News & Ratings for RCI Hospitality Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for RCI Hospitality and related companies with MarketBeat.com's FREE daily email newsletter.



Comments


share news on Facebook
tweet this investment news
share on linkedin
share on StockTwits
share on reddit