McDonald’s Vs. Wendy’s: Which Restaurant Stock Is The Better Pick?

Latest Movements

During Q3, WEN reported net income of $39.8 million, a 13.7% decline from the $46.1 million from one year earlier. Total revenues were $452.2 million, a 3.3% increase from the $437.9 million of one year earlier. WEN’s diluted earnings per share of $0.17 was a three-cent dip from the $0.20 generated in the previous year.

In the Q3 earnings report, President and CEO Todd A. Penegor talked up the Q4 potential from the company’s efforts to increase awareness of its breakfast menu and chicken sandwich line. He also acknowledged the company’s plans for overseas expansion were moving slower than hoped due to “some high potential emerging markets where the recovery period has taken a bit longer,” but he added the company will “continue to make progress toward our plan to expand into Europe and remain on track to open restaurants in the U.K. in the first half of 2021.”

Over at MCD, Q3 net income was $1.76 billion, up 10% from the $1.6 billion from Q3 2019, while revenue $5.41 billion, down 2% year-over-year from $5.5 billion. MCD’s diluted earnings per share of $2.35 was an 11% increase from one year earlier. 

Kevin Ozan, executive vice president and chief financial officer, was cautiously optimistic about the company’s performance in the Q3 earnings call, noting how MDC began Q3 with “nearly all of our global restaurants open for business, and they remain open today.” But he also observed the resurgence in the pandemic and “numerous instances of government restrictions on operating hours, limited dining capacity in most countries and, in some cases, mandated dining room closures” as having an impact in near-future operations.

Recent Financial Performance

WEN is trading at $21.24, much closer to its 52-week high of $24.91 than its 52-week low of $6.82. It has a Trade Grade of “C,”, a Buy & Hold Grade of “B,” a Peer Grade of “D” and an Industry Rank of “B.” It places 33 out of 49 stocks in the Restaurants category and has an overall POWR Rating of “C” (for neutral).

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