Yum! Brands (NYSE: YUM) and Popeyes Louisiana Kitchen (NASDAQ:PLKI) are both cyclical consumer goods & services companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.
Risk and Volatility
Yum! Brands has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500. Comparatively, Popeyes Louisiana Kitchen has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500.
Yum! Brands pays an annual dividend of $1.20 per share and has a dividend yield of 1.5%. Popeyes Louisiana Kitchen does not pay a dividend. Yum! Brands pays out 70.2% of its earnings in the form of a dividend. Popeyes Louisiana Kitchen has increased its dividend for 8 consecutive years.
Valuation and Earnings
This table compares Yum! Brands and Popeyes Louisiana Kitchen’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Yum! Brands||$6.37 billion||4.32||$1.62 billion||$1.71||47.72|
|Popeyes Louisiana Kitchen||N/A||N/A||N/A||$1.98||39.90|
Yum! Brands has higher revenue and earnings than Popeyes Louisiana Kitchen. Popeyes Louisiana Kitchen is trading at a lower price-to-earnings ratio than Yum! Brands, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and target prices for Yum! Brands and Popeyes Louisiana Kitchen, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Popeyes Louisiana Kitchen||1||4||1||0||2.00|
Yum! Brands currently has a consensus target price of $80.40, suggesting a potential downside of 1.47%. Popeyes Louisiana Kitchen has a consensus target price of $69.75, suggesting a potential downside of 11.71%. Given Yum! Brands’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Yum! Brands is more favorable than Popeyes Louisiana Kitchen.
Institutional & Insider Ownership
73.7% of Yum! Brands shares are owned by institutional investors. Comparatively, 97.6% of Popeyes Louisiana Kitchen shares are owned by institutional investors. 0.7% of Yum! Brands shares are owned by company insiders. Comparatively, 2.2% of Popeyes Louisiana Kitchen shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares Yum! Brands and Popeyes Louisiana Kitchen’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Popeyes Louisiana Kitchen||15.08%||490.51%||15.48%|
Yum! Brands beats Popeyes Louisiana Kitchen on 9 of the 15 factors compared between the two stocks.
Yum! Brands Company Profile
YUM! Brands, Inc. is engaged in restaurant business. As of December 31, 2016, the Company operated or franchised over 43,500 restaurants in more than 135 countries and territories operating under the KFC, Pizza Hut or Taco Bell (collectively the Concepts) brands. The Company operates through three segments: The KFC Division, which includes the operations of the KFC concept around the world; The Pizza Hut Division, which includes the operations of the Pizza Hut concept around the world, and The Taco Bell Division, which includes the operations of the Taco Bell concept around the world. KFC restaurants across the world offer fried and non-fried chicken products, such as sandwiches, chicken strips, chicken-on-the-bone and other chicken products. Pizza Hut is a restaurant chain specialized in the sale of ready-to-eat pizza products. Taco Bell specializes in Mexican-style food products, including various types of tacos, burritos, quesadillas, salads, nachos and other related items.
Popeyes Louisiana Kitchen Company Profile
Popeyes Louisiana Kitchen, Inc. (Popeyes) develops, operates and franchises quick-service restaurants (QSRs) under the trade names Popeyes Louisiana Kitchen and Popeyes Chicken & Biscuits. The Company conducts its operations through two segments: franchise operations and Company-operated restaurants. The Company-operated restaurant segment includes the operation of Company-owned restaurants. The franchise operations segment consists of domestic and international franchising activities. The Company’s Louisiana style menu features spicy chicken, chicken tenders, fried shrimp and other seafood, red beans and rice, and other regional items. As of December 25, 2016, the Company operated and franchised 2,688 Popeyes restaurants in 48 states, the District of Columbia, three territories and 25 foreign countries. As of December 25, 2016, of the 55 Company-operated restaurants, approximately 84% were concentrated in Louisiana, North Carolina and Tennessee.
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