What would our life be without delicious foods from all over the world? I would feel incomplete without my favorite hole-in-the-wall that serves the best food in town. Unfortunately, my beloved fast food joint is far from making a stock market debut. On the other hand, plenty of multinational fast-food companies are available for investors on the stock market.
Many partners with food delivery companies to offer their customers the smoothest experience. They are successful to various degrees both at home and internationally. There is fierce competition, and they all want as much market share as possible. This article will explore some of the biggest players in the restaurant industry and fast food stocks.
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1. McDonald’s (NYSE: MCD)
We begin our fast food stocks list with one of the biggest names from any industry. McDonald’s has been around for more than 80 years and keeps growing year after year. Today, the company operates over 38,000 locations across more than 100 countries.
During the pandemic, most of its restaurants were equipped with drive-thru, delivery, and takeout options. This was thanks to a considerable investment in all those areas before the pandemic.
On top of this, McDonald’s and DoorDash (NYSE: DASH) teamed up in the US, Canada, and Australia to deliver from over 13,000 locations. They are now working to expand their delivery footprint to more countries.
The brand is so popular that you can always find its signature logo in cities, stadiums, televisions, and other spaces worldwide. The logo might be unmistakable, but the food can vary from location to location.
Many travelers seek a McDonald’s to taste the local menu when entering a new country. The brand is so popular that there is even a Big Mac Index that shows the price of a Big Mac in various countries.
In the years ahead, McDonald’s will undoubtedly keep growing thanks to numerous partnerships, sponsorships, and a stronger presence in big cities worldwide.
2. Starbucks (NASDAQ: SBUX)
Starbucks is another American multinational company in our fast food stocks list. It has stores in over 80 countries, totaling more than 35,000 locations. Since its creation, Starbucks has upgraded its menu from coffee to tea and various foods for all times of the day.
In the last decade, wealthier customers have liked the brand. Starbucks’ menu is more expensive than its competitors, and the brand has installed a culture around its products. Many of its customers impatiently await the return of the Pumpkin Spice Latte every fall.
In the last decade, Starbucks has created numerous partnerships with other brands to sell them in their stores. Two are Seattle’s Best Coffee and Teavana, which Starbucks owns. Others are Nestlé (OTCMKTS: NSRGY)and Danone.
\Starbucks also creates original products and sells them to its customers. Furthermore, the company partnered with Uber Eats (NYSE: UBER) and DoorDash to deliver its products in the US and other locations. Many consumers want to avoid big brands and consume local and sustainable products.
Starbucks will likely continue to grow, but it will face new competitors. Products and tastes can be replicated. The best branding will win, and the Starbucks cup can be recognized worldwide.
3. Domino’s (NYSE: DPZ)
Domino’s is the largest pizza chain in the world. It can serve customers across 90 countries thanks to almost 20,000 stores. Before the pandemic began, Domino’s was very successful with its delivery and take-out services.
Many customers were regulars thanks to its application and website. Hence, sales during the pandemic increased. In the US alone, sales grew by 11% in 2020. Since then, revenue has grown by at least 4% YoY in 2021, 2022, and 2023.
Furthermore, third-party delivery sales also grew. It’s safe to say that Domino’s was ready for the pandemic. It was one of the few brands that opened new restaurants and increased sales during this difficult time for most businesses.
Domino’s isn’t known for its partnerships and advertisements. In the food delivery industry, they have partnerships with lesser-known Grab and Foodpanda.
As for advertisements, they are straightforward and emphasize timely and fresh delivery and the pizza tracker. However, Domino’s recently partnered with Netflix (NASDAQ: NFLX) on their original show Stranger Things.
Custom pizza boxes were sent, and their customers loved them. To keep growing, Domino’s might have to spend more on partnerships to increase consumer engagement and stay on top of its competition. We’d be remiss if we didn’t add them to our fast food stocks list.
Chipotle ($CMG) TipRanks Stock Forecast Report 3/24
4. Chipotle (NYSE: CMG)
In the last few years, Chipotle has been one of the most dynamic brands on the market. Currently, the company operates 3182 locations in the US, the UK, Canada, France, and Germany.
Over 400 new restaurants have been opened in the last three years, and more are coming. Many of them offer delivery and drive-thru options. That aspect of Chipotle’s business is part of its growth.
Consumers have many different ways of putting their hands on delicious Mexican food. They can order their favorite meals in countless cities thanks to third-party delivery services.
Since the pandemic began, revenue has been increasing, and there is no slowing ahead. YoY revenue growth was 7.13% in 2020, 26.11% in 2021 and 14.41% in 2022.
Last year, Chipotle’s annual revenue was $8.635B. What about profits? There hasn’t been a single unprofitable year dating back to 2010. It was \$489M back then, and last year, it increased to over \$2B for the first time.
The stock price is currently at an all-time high above $2,300, which might be the only negative aspect as it isn’t cheap, and not every investor can afford it. Regardless, the company is doing well, and great things might still be ahead. For fast food stocks like \$CMG, learn options trading.
5. Yum China Holdings (NYSE: YUM)
We conclude our fast food stocks list with Yum and its Chinese Holdings company. Before writing this article, I wasn’t aware that both companies were responsible for some of the oldest names in the fast food industry.
Tickers trade on the NYSE under \$YUM and \$YUMC. Going back in history, Yum! Spun off from Pepsico in 1997. Two decades late in 2016, Yum China Holdings spun off from Yum!
Recently, I learned that Yum! is in charge of some of the most popular restaurants in the US, namely Pizza Hut, Taco Bell, and KFC. Its Chinese counterpart operates the local versions of these chains.
Sales in the US and China are hard to compare, especially since many Chinese companies are getting audited due to inconsistencies in their earnings. One of Starbucks’ Chinese competitors, Luckin Coffee, ran into issues with the SEC for providing false quarterly reports and artificially boosting their sales numbers.
Let’s hope it isn’t the case with Yum China Holdings. It has been performing very well recently, and its stock price is also high. Keep this stock on your watchlists if it isn’t already.
Final Thoughts: Fast Food Stocks
The restaurant and fast food industry has always been very competitive. With the pandemic, many chains had to adapt to the delivery and takeout world. Many family-owned shops closed because they couldn’t compete with the big guys.
On the bright side, investors have many options as the industry is still expanding, and many partnerships are possible with other industries.
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Frequently Asked Questions
Fast food stocks like McDonald's and Chipotle are some of the best restaurant stocks to invest in.
Fast food stocks will always be a great buy. This industry is busy no matter what because we need to eat.
