While strengthening their online presence helped fast-food restaurants stay afloat over the past year, they are now, finally, witnessing a resumption in on-premises dining due to solid progress on the COVID-19 vaccination front. Therefore, fundamentally sound fast-food stocks McDonald’s (MCD) and Wingstop (NASDAQ:WING) should benefit. But which of these stocks is a better buy now? Read more to find out. McDonald’s Corporation (MCD), which is headquartered in Oak Brook, Illinois, and Wingstop Inc . (WING) in Dallas, Tex., are two prominent players in the fast-food restaurant industry. MCD 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. WING, together with its subsidiaries, franchises, and operates restaurants under the Wingstop brand name. Its restaurants offer classic wings, boneless wings, and tenders cooked-to-order and hand-sauced-and-tossed in various flavors. As of December 26, 2020, the company had 1,506 franchised restaurants and 32 company-owned restaurants.
Digitalization of operations and contactless delivery services helped fast-food restaurants maintain their sales amid the COVID-19 pandemic. But these restaurants have been witnessing increasing foot traffic lately, owing to the strong vaccination drive, a decline in COVID-19 cases, and the easing of travel restrictions. The global quick-service restaurant market is expected to grow at 5.1% CAGR to $815.60 billion by 2026. So, both MCD and WING are expected to benefit.
But while WING’s shares have lost 6.8% in price over the past month, MCD surged marginally. MCD is a clear winner with 16.1% gains versus WING’s 15.9% returns in terms of their past nine months’ performance. But which of these stocks is a better pick now? Let’s find out.