Sonic Corp. (SONC) and Its Competitors Critical Analysis

Sonic Corp. (NASDAQ: SONC) is one of 22 publicly-traded companies in the “Quick Service Restaurants” industry, but how does it contrast to its competitors? We will compare Sonic Corp. to similar companies based on the strength of its institutional ownership, profitability, risk, valuation, earnings, analyst recommendations and dividends.

Risk & Volatility

Sonic Corp. has a beta of 1.77, indicating that its stock price is 77% more volatile than the S&P 500. Comparatively, Sonic Corp.’s competitors have a beta of 0.53, indicating that their average stock price is 47% less volatile than the S&P 500.

Institutional & Insider Ownership

79.8% of shares of all “Quick Service Restaurants” companies are owned by institutional investors. 6.2% of Sonic Corp. shares are owned by insiders. Comparatively, 16.8% of shares of all “Quick Service Restaurants” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Sonic Corp. and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Sonic Corp. $515.82 million $158.68 million 16.43
Sonic Corp. Competitors $3.06 billion $846.52 million 29.49

Sonic Corp.’s competitors have higher revenue and earnings than Sonic Corp.. Sonic Corp. is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Sonic Corp. and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sonic Corp. 13.23% -44.21% 9.71%
Sonic Corp. Competitors 6.90% 12.59% 9.54%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Sonic Corp. and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sonic Corp. 1 7 5 0 2.31
Sonic Corp. Competitors 326 1460 1669 85 2.43

Sonic Corp. currently has a consensus price target of $27.67, indicating a potential upside of 12.28%. As a group, “Quick Service Restaurants” companies have a potential upside of 10.53%. Given Sonic Corp.’s higher possible upside, research analysts clearly believe Sonic Corp. is more favorable than its competitors.

Dividends

Sonic Corp. pays an annual dividend of $0.56 per share and has a dividend yield of 2.3%. Sonic Corp. pays out 37.3% of its earnings in the form of a dividend. As a group, “Quick Service Restaurants” companies pay a dividend yield of 1.5% and pay out 43.1% of their earnings in the form of a dividend. Sonic Corp. is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Summary

Sonic Corp. competitors beat Sonic Corp. on 9 of the 15 factors compared.

Sonic Corp. Company Profile

Sonic Corp. operates and franchises the chain of drive-thru restaurants (Sonic Drive-Ins) in the United States. As of August 31, 2016, 3,557 Sonic Drive-Ins were in operation from coast to coast in 45 states, consisting of 345 Company drive-thrus and 3,212 franchise drive-thrus. As of August 31, 2016, its restaurant design and construction consisted of a kitchen housed in a one-story building, which was approximately 1,500 square feet, flanked by canopy-covered rows of 16 to 24 parking spaces, with each space having its own payment terminal, intercom speaker system and menu board. At a Sonic Drive-In, a customer drives into one of the parking spaces, orders through the intercom speaker system and has the food delivered by a carhop and Sonic Drive-Ins also include a drive-thru lane and patio seating to provide customers with alternative dining options. Its food items include specialty drinks, such as cherry limeades and slushes, ice cream desserts and chicken sandwiches and hamburgers.

Receive News & Ratings for Sonic Corp. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Sonic Corp. and related companies with MarketBeat.com's FREE daily email newsletter.

Latest News

Leave a Reply