In addition to the growth of food delivery services, the pent-up demand for dining out should drive the fast-food industry’s sales growth in the fourth quarter. Therefore, we think fast-food stocks McDonald’s (MCD) and Jack in the Box (JACK) should benefit. But which of these stocks is a better buy now? Read more to find out.McDonald’s Corporation (MCD) and Jack in the Box Inc. (JACK) are two prominent players in the fast-food restaurant industry. MCD, which is based in Oak Brook, Ill., operates and franchises McDonald’s restaurants that serve mainly locally relevant fast food, soft drinks, and other beverages worldwide. As of December 31, 2020, the company operated 39,198 restaurants. In comparison, JACK, which is headquartered in San Diego, Calif., operates and franchises Jack in the Box quick-service restaurants that offer a variety of hamburger chains and other breakfast items. As of September 27, 2020, it operated and franchised 2,241 Jack in the Box quick-service restaurants.
Online food ordering, contactless delivery services, drive-thru, and new vegan recipes have helped fast-food companies combat COVID-19 pandemic-driven impacts to their businesses. Even though food prices are rising due to supply chain bottlenecks, fast-food companies should see rising sales thanks to pent-up demand. The global fast-food market is expected to grow at a 4.5% CAGR to $773.44 billion by 2027. So, both MCD and JACK should benefit.
While JACK lost 5.9% in price over the past three months, MCD has surged 6.5%. MCD is a clear winner with 17.7% gains versus JACK’s negative returns in terms of their past nine months’ performance. But which of these stocks is a better pick now? Let us find out.