Restaurant Brands International (NYSE:QSR) and FAT Brands (NASDAQ:FAT) are both retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, risk, valuation, institutional ownership, profitability and dividends.
Risk & Volatility
Restaurant Brands International has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500. Comparatively, FAT Brands has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500.
This table compares Restaurant Brands International and FAT Brands’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Restaurant Brands International||$4.58 billion||3.07||$648.80 million||$2.10||26.58|
|FAT Brands||$2.17 million||30.82||-$610,000.00||N/A||N/A|
Restaurant Brands International has higher revenue and earnings than FAT Brands.
This is a summary of recent ratings for Restaurant Brands International and FAT Brands, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Restaurant Brands International||0||3||12||0||2.80|
Restaurant Brands International presently has a consensus price target of $69.40, indicating a potential upside of 24.33%. FAT Brands has a consensus price target of $12.00, indicating a potential upside of 106.90%. Given FAT Brands’ stronger consensus rating and higher probable upside, analysts clearly believe FAT Brands is more favorable than Restaurant Brands International.
Restaurant Brands International pays an annual dividend of $1.80 per share and has a dividend yield of 3.2%. FAT Brands pays an annual dividend of $0.48 per share and has a dividend yield of 8.3%. Restaurant Brands International pays out 85.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Restaurant Brands International has raised its dividend for 3 consecutive years.
Institutional and Insider Ownership
80.7% of Restaurant Brands International shares are owned by institutional investors. Comparatively, 1.0% of FAT Brands shares are owned by institutional investors. 3.8% of Restaurant Brands International shares are owned by insiders. Comparatively, 1.3% of FAT Brands shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares Restaurant Brands International and FAT Brands’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Restaurant Brands International||12.76%||28.42%||5.92%|
Restaurant Brands International beats FAT Brands on 9 of the 15 factors compared between the two stocks.
Restaurant Brands International Company Profile
Restaurant Brands International Inc. owns, operates, and franchises quick service restaurants under the Tim Hortons (TH), Burger King (BK), and Popeyes (PLK) brand names. The company operates through three segments: TH, BK, and PLK. Its restaurants offer blend coffee, tea, espresso-based hot and cold specialty drinks, donuts, Timbits, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps, soups, hamburgers, chicken and other specialty sandwiches, french fries, soft drinks, chicken, chicken tenders, fried shrimp and other seafood, red beans and rice, and other food items. As of December 31, 2017, the company owned or franchised a total of 4,748 TH restaurants, 16,767 BK restaurants, and 2,892 PLK restaurants in approximately 100 countries and U.S. territories worldwide. Restaurant Brands International Inc. was founded in 1954 and is headquartered in Oakville, Canada.
FAT Brands Company Profile
FAT Brands Inc., a multi-brand franchising company, acquires, markets, and develops fast casual and casual dining restaurant concepts. As of November 20, 2018, it owned 6 restaurant brands, such as Fatburger, Buffalo's Cafe, Buffalo's Express, Hurricane Grill & Wings, Ponderosa, and Bonanza Steakhouses that had approximately 300 locations open and 300 under development in 32 countries. The company was founded in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. is a subsidiary of Fog Cutter Capital Group Inc.
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