McDonald's Vs. Shake Shack: Which Stock Is A Better Buy?

NYSE: MCD | McDonald's Corporation  News, Ratings, and Charts

The restaurant industry was severely impacted at the beginning of the COVID-19 pandemic, which forced millions of stores and restaurants worldwide to close. Faced with lockdown conditions, major players began integrating contactless delivery and digital sales into their operations. As the industry steadily recovers next year, as is expected, and more people venture outdoors having been vaccinated against the virus, fast-food giants like McDonald’s Corporation (MCD) and Shake Shack (SHAK) should benefit from increased traffic. But which of these stocks is a better buy now? Let’s find out.

Quick-service restaurants (QSRs) have garnered strong momentum following news on the development of COVID-19 vaccines last month.  After suffering near-death business setbacks early in the year, the industry is now trending up due to the rollout and mass distribution of coronavirus vaccines.

Despite store closures and decline in traffic on account of social-distancing protocols, McDonald’s Corporation (MCD - Get Rating) and Shake Shack, Inc. (SHAK - Get Rating), two of the world’s prominent fast-food restaurant companies, have fared better than traditional restaurant chains and managed to stay afloat amid the pandemic by rapidly integrating digital sales, delivery services and takeaways.

MCD is one of the world’s leading global foodservice retailers with more than 39,000 locations in more than 100 countries worldwide. Its restaurants offer various food products and beverages, as well as a breakfast menu. Approximately 93% of MCD’s restaurants are franchised and operated by independent local business owners. The company functions through three segments – U.S., International Operated Markets, and International Developmental Licensed Markets & Corporate.

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SHAK owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. It is one of the most popular burger-chains that also offers hot dogs, crinkle cut fries, craft beer, beverages, and other products. The company has more than 300 domestic stores, and more than 100 international locations including London, Hong Kong, Shanghai, Dubai, and more.

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