McDonald’s (NYSE:MCD) and Life Time Group (NYSE:LTH) Head-To-Head Review

McDonald’s (NYSE:MCD) and Life Time Group (NYSE:LTH) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings for McDonald’s and Life Time Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
McDonald’s	1	13	22	1	2.62
Life Time Group	0	0	13	2	3.13

McDonald’s currently has a consensus price target of $295.94, suggesting a potential upside of 21.79%. Life Time Group has a consensus price target of $55.31, suggesting a potential upside of 36.72%. Given Life Time Group’s stronger consensus rating and higher probable upside, analysts plainly believe Life Time Group is more favorable than McDonald’s.

Profitability

This table compares McDonald’s and Life Time Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
McDonald’s	31.72%	-572.06%	14.92%
Life Time Group	13.07%	10.56%	4.13%

Risk and Volatility

McDonald’s has a beta of 0.44, indicating that its share price is 56% less volatile than the S&P 500. Comparatively, Life Time Group has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500.

Valuation and Earnings

This table compares McDonald’s and Life Time Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
McDonald’s	$26.89 billion	6.40	$8.56 billion	$12.31	19.74
Life Time Group	$3.00 billion	3.02	$373.67 million	$1.84	21.98

McDonald’s has higher revenue and earnings than Life Time Group. McDonald’s is trading at a lower price-to-earnings ratio than Life Time Group, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

70.3% of McDonald’s shares are held by institutional investors. Comparatively, 79.4% of Life Time Group shares are held by institutional investors. 0.3% of McDonald’s shares are held by company insiders. Comparatively, 13.3% of Life Time Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Life Time Group beats McDonald’s on 8 of the 15 factors compared between the two stocks.

About McDonald’s

McDonald’s Corp. engages in the operation and franchising of restaurants. It operates through the following segments: U.S., International Operated Markets, and International Developmental Licensed Markets and Corporate. The U.S. segment focuses its operations on the United States. The International Operated Markets segment consists of operations and the franchising of restaurants in Australia, Canada, France, Germany, Italy, the Netherlands, Spain, and the U.K. The International Developmental Licensed Markets and Corporate segment consists of developmental licensee and affiliate markets in the McDonald’s system. The firm’s products include Big Mac, Quarter Pounder with Cheese, Filet-O-Fish, several chicken sandwiches, Chicken McNuggets, wraps, McDonald’s Fries, salads, oatmeal, shakes, McFlurry desserts, sundaes, soft serve cones, pies, soft drinks, coffee, McCafe beverages, and other beverages. The company was founded by Raymond Albert Kroc on April 15, 1955, and is headquartered in Oak Brook, IL.

About Life Time Group

Life Time Group Holdings, Inc. provides health, fitness, and wellness experiences to a community of individual members in the United States and Canada. It primarily engages in designing, building, and operating of sports and athletic, professional fitness, family recreation, and spa centers in a resort-like environment, principally in suburban and urban locations of metropolitan areas. The company also offers fitness floors with equipment, locker rooms, group fitness studios, indoor and outdoor pools, bistros, indoor and outdoor tennis courts, pickleball courts, basketball courts, LifeSpa, LifeCafe, and childcare and Kids Academy learning spaces. In addition, its Life Time Digital provides live streaming fitness classes, remote goal-based personal training, nutrition and weight loss support, curated award-winning health, and fitness and wellness content. The company is also involved in media activities, conducting athletic events, and provision of related services. It operates various centers, including ground leases. The company was formerly known as LTF Holdings, Inc. and changed its name to Life Time Group Holdings, Inc. in June 21, 2021. Life Time Group Holdings, Inc. was founded in 1992 and is headquartered in Chanhassen, Minnesota.