ISO 9001:2015

RISK AND RETURN ANALYSIS FOR INVESTORS: A COMPARATIVE STUDY OF MCDONALD’S & STARBUCKS

Dr. Srilakshmi Ramu, Saksham Goswami & Ansy Sarakula

The food and beverage industry remain a vital and dynamic part of the world economy, demonstrating flexibility and resiliency despite shifting consumer tastes and economic difficulties. The global food and beverage industry was valued at USD 8.7 trillion in 2023 and is expected to reach USD 9.2 trillion in 2024, with a compound annual growth rate (CAGR) of 5.6% between 2023 and 2024, according to cognitive market research. The industry has consistently attracted a lot of investment from investors, and among the leading entities in the world have been McDonald's and Starbucks. This paper provides an analysis of the risk-return profiles of McDonald's and Starbucks' stocks in the last five years, using financial and market data to provide an interpretation regarding the investment potential of the two companies. Utilizing exploratory and descriptive statistical methods, this research evaluates the monthly returns, beta coefficients, and standard deviations to assess the relationship between the stock returns of the two companies and major market indices, including the Dow Jones Industrial Average. Through the critical risk and return indicators, including beta and standard deviation, the study provides a deep insight into the financial performance and market positioning of each company. The findings that will be derived will help investors make informed decisions by comparing the stability and growth prospects of McDonald's and Starbucks, thus underlining the most appropriate investment option within the food and beverage industry.


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