GO
Loading...

Why Cramer Prefers McDonald’s Over Wendy’s Stock

Call it the “Battle of the Burger!”

“Mad Money” host Jim Cramer on Wednesday compared two fast food chain operators, McDonald’s and Wendy’s, to determine which has the better stock.

“The company with the better product doesn't always have the better stock,” Cramer said. “Wendy's might have the tastier burgers, but I'd rather buy McDonald's with its 2.9 percent yield and fabulous track record of execution and new management any day of the week.”

Cramer prefers McDonald’s stock because he thinks the company executes extremely well. Wendy’s, on the other hand, has a history of over promising and under delivering. While Wendy’s has recently improved same-store sales, Cramer is concerned about the scale of its restructuring plan. He thinks Wendy’s might be able to pull it off, but warned that these types of things take time. If Wendy’s can execute well, though, he thinks the stock could go much higher, but said “that’s far from a sure thing.”

“Wendy's is still trying to find itself, but the world already knows McDonald's,” Cramer said. “We know that McDonald's still has a ton of room to expand overseas, especially in India, China and Eastern Europe.”

Bottom line: Cramer thinks McDonald’s is the better buy, trading at 15.4 times earnings with a consistent 10 percent long-term growth rate while Wendy’s trades at 22.6 times earnings with a 17.5 percent growth trade that might not come to fruition.

Symbol
Price
 
Change
%Change
MCD
---
WEN
---

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

Contact Mad Money

  • Showtimes

    U.S.
    Monday - Friday 6p ET
    Australia
    Saturday 8a, 1p, 7p SYD
    Sunday 12a, 1a, 8a, 7p SYD
    New Zealand
    Saturday 10a, 3p, 9p NZ
    Sunday 2a, 3a, 10a, 9p NZ
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.

Mad Money Moments

Cramer's New Book