MCD, YUM or BROS: Which Restaurant Stock Offers the Best 2026 Setup?

The U.S. restaurant industry is navigating a softer demand backdrop as consumers remain cautious on discretionary spending. Value sensitivity, mixed traffic trends and ongoing cost pressure continue to shape operating conditions, and this has dampened industry performance. The Zacks Retail – Restaurants industry has declined 5.6% in the year-to-date period, underperforming the Zacks S&P 500 composite, which has advanced 16.3%, reflecting a tougher market setup and a more selective recovery environment.

However, the backdrop is not entirely negative. Brands with strong customer loyalty, clear value positioning, successful menu innovation and a scalable operating model continue to demonstrate relative resilience. Consistent execution, disciplined growth strategies and a growing digital ecosystem are helping these operators manage the current environment while supporting long-term visibility. 

Within this landscape, McDonald's Corporation MCD, Yum! Brands, Inc. YUM and Dutch Bros Inc. BROS stand out as meaningful players navigating the same macro backdrop but with different strategic approaches.

McDonald’s: Value Strategy and Innovation Anchor Growth Prospects

McDonald’s growth setup rests on value positioning, strong brand relevance and disciplined execution under its Accelerating the Arches strategy. Loyalty programs, marketing campaigns and menu innovation also help reinforce demand trends heading toward 2026.

International operations remain a key support, with solid comparable sales, localized value strategies and digital engagement helping sustain customer activity. Global comparable sales increased 3.6% in the third quarter, supported by marketing effectiveness, brand strength and targeted value initiatives across major markets. 

At the same time, the operating environment remains mixed. Lower-income guest traffic declined sharply in the quarter, while higher-income traffic improved, reflecting a bifurcated demand backdrop alongside ongoing cost and inflation pressure. Value perception, pricing discipline and customer engagement remain central to managing these dynamics as the company positions for 2026 performance.

The Zacks Consensus Estimate projects 2026 sales to rise 5.7%, while earnings are expected to grow 9.6% year over year. Year to date, this Zacks Rank #3 (Hold) stock has gained 10.2%. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Yum! Brands: Digital Scale and Global Expansion Drive Momentum

Yum! Brands is shaping its 2026 positioning through digital acceleration, brand strength and disciplined international development. Enhanced digital capabilities, including rising voice-AI adoption and upgraded ordering platforms, are helping improve throughput, order accuracy and customer experience across KFC, Taco Bell and Pizza Hut.

Digital engagement remains a standout advantage. In the third quarter of 2025, Yum! delivered record digital system sales of approximately $10 billion, with digital transactions accounting for nearly 60% of total system sales, supported by loyalty initiatives, mobile ordering and delivery momentum.

However, the operating backdrop still carries challenges. Certain international markets face uneven demand trends, labor and commodity costs remain key considerations, and promotional intensity requires disciplined execution to protect margins. These dynamics make efficiency, pricing balance and franchise health important focus areas.

Ongoing investment in automation, new restaurant formats and global development is intended to support growth, strengthen franchise economics and reinforce Yum! Brands’ competitive positioning as conditions evolve further into 2026.

The Zacks Consensus Estimate projects 2026 sales to rise 9.1%, while earnings are expected to grow 8.1% year over year. Year to date, shares of this Zacks Rank #3 stock have advanced 15.3%.

Dutch Bros: Transaction Strength With Rapid Unit Expansion

Dutch Bros is building a 2026 setup around accelerating shop growth, strong transaction gains and a differentiated digital and loyalty ecosystem. In the third quarter of 2025, performance underscored this momentum, with revenues up 25%, system same-shop sales up 5.7% and company-operated same-shop sales up 7.4%, driven largely by transaction growth. Record AUVs, expanding brand reach, rising loyalty penetration and strong new-unit productivity continue to support confidence in the growth model.

Development visibility also remains strong. The pipeline has reached record levels. Management plans approximately 175 new system shops in 2026 and remains committed to its multiyear target of 2,029 shops in 2029. Early results from the new food program are encouraging, supporting both transactions and ticket alongside growing digital engagement.

However, cost pressure remains a key consideration. Higher coffee prices, rising labor-related expenses in certain states and incremental costs tied to the food rollout and new-market expansion are weighing on margins, with management expecting elevated coffee costs to persist into 2026.

The Zacks Consensus Estimate projects 2026 sales to rise 24.2%, while earnings are expected to grow 27.9% year over year. Year to date, shares of this Zacks Rank #3 stock have advanced 24%.

Bottom Line

Overall, the restaurant industry is still working through a softer spending environment, but stronger operators with clear growth drivers appear better positioned for the next phase. McDonald’s offers stability supported by brand relevance and value execution. Yum! Brands provide global diversification, digital strength and steady expansion. Dutch Bros, however, stands out with its faster expected revenue and earnings growth, along with stronger stock price performance, supported by rising transactions, expanding store footprint and growing customer engagement. As investors look toward 2026, Dutch Bros appears to offer the most compelling upside potential among the three, while the other two names present more measured, steady setups.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research