Why is burger king's market cap only 3B?

Question

To me, McDonalds and BK go hand in hand and seem to be on the same level. But what makes McDonalds so much more popular than BK? Is it their advertising? Global expansion?

If it is those two and/or more please explain in correlation to the stock market in why Mcdonalds market cap is much higher. Thanks

Answer 1

http://finance.yahoo.com/q/is?s=BKC

http://finance.yahoo.com/q/is?s=MCD

Earnings, earnings, earnings my friend.  Net income quarter ending march for BK is 41 mil, 1.46 bil for MCD (the proper measurement would be annually, but yahoo finance didn't show annual data for MCD, and I didn't feel like adding it up).  

Earnings control the market.  If both companies had the same earnings and earnings growth, they would have nearly the same market cap (in theory, in actuality one would attract more buyers, one would have more optimisim because of new foods stores and products, etc.).  I would suggest you learn about the P/E ratio here http://investopedia.com/university/perat...

Once you understand this, you can see why companies are tentatively valued at what they are, and understand how earnings and earnings growth influence stock prices, as well as the limits of the P/E.

Good luck.