ETF Comparison
MCD vs PEP: Which Is the Better Pick in 2026?
A head-to-head comparison of McDonald's Corporation and PepsiCo, Inc. covering yield, cost, risk, and income potential.
Data updated July 4, 2026
Side-by-side snapshot
| MCD | PEP | |
|---|---|---|
| Full name | McDonald's Corporation | PepsiCo, Inc. |
| Issuer | — | — |
| Last Close | $280.63 as of July 4, 2026 | $144.22 as of July 4, 2026 |
| Distribution yield | 2.76% | 4.03% |
| Distribution Safety Score | 100 | 100 |
| Expense ratio | — | — |
| AUM | — | — |
| Distribution frequency | Quarterly | Quarterly |
| Underlying index | — | — |
| Objective | Operates and franchises McDonald's restaurants serving a locally relevant menu of food and beverages in more than 100 countries worldwide. | Manufactures, markets, distributes, and sells beverages and convenient foods worldwide under brands including Pepsi, Lay's, Gatorade, and Quaker. |
| Asset class | Equity | Equity |
| Inception date | N/A | N/A |
| Beta | 0.414 | 0.359 |
| Last dividend | $1.8600 | $1.4800 |
| Ex-dividend date | 06/02/2026 | 06/05/2026 |
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Visual comparison
Key metrics
Projected income on $10K
Projections assume the current yield and share price remain constant. Actual results will vary.
Total returns
MCD has lagged PEP over the trailing twelve months, posting a -4.03% total return against 9.69%. The picture flips over 10 years, though — MCD has compounded at 11.41% a year, ahead of PEP at 6.26%. Figures are total returns: price change plus every distribution reinvested.
| Symbol | YTD | 1Y | 3Y | 5Y | 10Y | Since Jun 1972 | Volatility | Sharpe | Sortino | Max drawdown |
|---|---|---|---|---|---|---|---|---|---|---|
| MCD | -6.95% | -4.03% | 0.49% | 6.12% | 11.41% | 19.09% | 17.7% | -0.23 | -0.31 | -22.0% |
| PEP | 2.31% | 9.69% | -5.14% | 2.44% | 6.26% | 11.64% | 19.8% | -0.50 | -0.69 | -29.2% |
Total return with all distributions reinvested on the ex-dividend date, split-adjusted, as of July 2, 2026. YTD and 1Y are cumulative; longer windows are annualized. “Since Jun 1972” measures every fund from June 1, 1972 — the youngest fund's first trading day — so all funds share one comparison window. Volatility is the annualized standard deviation of daily total returns over the trailing 3 years. Sharpe and Sortino divide the annualized return in excess of the risk-free rate by, respectively, that volatility and the downside deviation (both over the trailing 3 years) — higher is better. Max drawdown is the largest peak-to-trough total-return decline over the same window — shallower is better.
Quick verdict
MCD (McDonald's Corporation) and PEP (PepsiCo, Inc.) are both quarterly-pay stocks, but they take different approaches.
PEP offers the higher yield at 4.03% vs 2.76% for MCD. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.
Deep dive
Yield & income
On a $10,000 investment, MCD would generate roughly $23.00/month, while PEP would produce $33.58/month, at current distribution rates. Both pay quarterly distributions.
Cost & efficiency
Over 10 years on $10,000, MCD would cost approximately $0 in fees vs $0 for PEP (simplified, not compounded). Both charge the same expense ratio.
Strategy & risk
MCD is a stock, while PEP is a stock. Beta is 0.414 for MCD and 0.359 for PEP, indicating PEP is less volatile relative to the market.
Fund details
MCD is managed by — (launched 07/05/1966) with — in assets. PEP is managed by — (launched 06/01/1972) with — in assets.
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Frequently asked questions
Is MCD or PEP better for dividend income?
It depends on your goals. PEP currently offers the higher distribution yield, which means more income per dollar invested. However, a lower-yield fund may offer better total return or lower volatility. Consider your time horizon and risk tolerance.
What is the difference between MCD and PEP?
MCD (McDonald's Corporation) is a stock, while PEP (PepsiCo, Inc.) is a stock. They are issued by — and — respectively.
Can I hold both MCD and PEP?
Yes. Many income investors hold both to diversify across different strategies and underlying indexes. This can reduce concentration risk while maintaining a strong income stream.
Which has lower fees, MCD or PEP?
MCD has an expense ratio of — while PEP charges —. Lower fees mean more of your investment returns stay in your pocket over time.
How much income does $10,000 in MCD vs PEP generate?
At current rates, $10,000 in MCD would generate roughly $23.00 per month ($276.00 annually). The same in PEP would produce about $33.58 per month ($403.00 annually).
Which has performed better historically, MCD or PEP?
MCD has lagged PEP over the trailing twelve months, posting a -4.03% total return against 9.69%. The picture flips over 10 years, though — MCD has compounded at 11.41% a year, ahead of PEP at 6.26%. Figures are total returns: price change plus every distribution reinvested. Past performance does not guarantee future results.
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MCD vs PEP — at a glance
Generated June 2026 from current fund data.
Overview
McDonald's and PepsiCo are both mature, dividend-paying consumer stocks with long operating histories and global reach. McDonald's operates a franchise-heavy restaurant business across 100+ countries; PepsiCo manufactures and distributes beverages and snacks under a diversified brand portfolio. The key distinction is capital structure: MCD relies heavily on asset-light franchising and real estate ownership, while PEP generates income through direct manufacturing and distribution of packaged goods.
How they differ
MCD's business model revolves around collecting royalties and rent from franchisees, which creates high-margin, capital-efficient cash flows—a structural advantage reflected in its lower beta of 0.414 versus PEP's 0.359, though both are defensive. PEP yields 4.00% against MCD's 2.72%, a 128-basis-point spread that reflects PepsiCo's higher payout ratio and mature beverage/snack exposure. PEP operates in a more capital-intensive model (manufacturing plants, distribution networks) compared to MCD's franchise ecosystem; this differences shows up in capital allocation strategy and sensitivity to commodity input costs. Both pay dividends quarterly and have traded publicly for decades, but PEP's younger inception date (1972 vs. 1966) masks its deeper roots in the food-and-beverage conglomerate space.
Who each is best for
MCD: Fits investors seeking lower volatility and steady real estate-backed cash flows from a business model insulated from commodity headwinds. The lower yield appeals to growth-focused dividend holders or those prioritizing principal stability over current income.
PEP: Designed for income-oriented investors comfortable with mature, slower-growth consumer exposure and willing to accept higher distribution yields. Works for allocations emphasizing near-term cash return while holding a diversified consumer staple.
Key risks to know
- Franchise maturity and growth constraints. MCD's model depends on franchisee health and new-unit expansion in mature markets; slowdowns in franchisee investment or comparable-store sales can pressure royalty and rent growth, directly impacting dividend coverage over time.
- Commodity and input-cost exposure. PEP faces direct margin pressure from grain, sugar, oil, and labor costs embedded in manufacturing; sustained inflation in these inputs can erode profitability and force difficult choices between price increases (demand risk) and margin compression.
- Currency and emerging-market headwinds. Both derive material revenue from international operations; sustained dollar strength or macro weakness in EM regions (key growth markets for both) can create translation losses and reduce repatriated earnings.
- Changing consumer preferences. PEP is exposed to secular shifts away from sugary beverages and toward health-conscious alternatives; MCD faces ongoing pressure to adapt menus and compete against fast-casual and delivery-first models.
- Real estate and asset concentration. MCD's reliance on real estate values and franchisee lease structures creates indirect exposure to property-market cycles and interest-rate sensitivity when franchisees refinance or renew leases.
Bottom line
If you prioritize lower volatility and prefer capital-light, real estate-backed income, MCD's 2.72% yield and 0.414 beta offer a stabler profile. If you want higher current yield from a scaled manufacturing and distribution business, PEP's 4.00% distribution appeals—though at the cost of greater input-cost sensitivity and commodity exposure. Past performance doesn't guarantee future results; both are mature franchises in evolving consumer markets.
AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.
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