I agree, these two companies are not at all similar in what counts most to investors. JACK has a projected five year annual growth rate of 12%; MCD has a 9% growth rate projected. JACK sells at lower PE and PEG ratios than MCD, and its debt to equity ratio is better than McDonalds. JACK sells far more reasonably in terms of price to book value than does MCD. McDonalds already spun off its Chipotle brand for too low a price, whereas JACK still owns 100% of Qdoba and will not make the same mistake spinning it off at too low a valuation. JACK is a feasible buyout candidate, McDonalds is not. JACK is buying back its own stock at a much higher percentage of shares outstanding than is the case for McDonalds. JACK has not as yet benefitted from the inevitable turnaround in its business, but MCD has. Bottom line: best to watch the highway ahead rather than only look in the rear view mirror. Big J in L.A.
Speaking as an occasional fast food customer, JACK is at least as good as MCD. However, neither stock is a bargain at current prices, and both companies have lots of competition. Five Guys is the rock star of burger joints and is growing at a rapid pace. In-N-Out is a continuing threat, and you still have all those smaller chains and Mom and Pops to deal with. What's more, as growth inthe burger business stalls out, you are going to see much tougher competition.
If I were forced to buy a fast food stock, it would be MCD because of its relatively high sustainable dividend. That said, a recent Consumer Reports survey of 28,000 consumers ranked MCD dead last for quality on a list of 18 fast food burger joints.
Talk about comparing apples and oranges. You cannot even compare the two. MCD is a premier best of breed company. They simply do it better than anyone has for decades. JACK is an interesting speculation and turnaround that just happens to also be in the QSR business. True, they both sell burgers, but aside from that, they have very little in common.