Head-To-Head Comparison: Red Rock Resorts (NASDAQ:RRR) versus Restaurant Brands International (NYSE:QSR)

Red Rock Resorts (NASDAQ:RRR) and Restaurant Brands International (NYSE:QSR) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.

Analyst Recommendations

This is a summary of recent ratings and target prices for Red Rock Resorts and Restaurant Brands International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red Rock Resorts	0	4	16	1	2.86
Restaurant Brands International	0	7	16	0	2.70

Red Rock Resorts presently has a consensus target price of $71.94, suggesting a potential upside of 47.58%. Restaurant Brands International has a consensus target price of $84.04, suggesting a potential upside of 16.79%. Given Red Rock Resorts’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Red Rock Resorts is more favorable than Restaurant Brands International.

Valuation & Earnings

This table compares Red Rock Resorts and Restaurant Brands International”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red Rock Resorts	$2.01 billion	2.55	$188.07 million	$2.83	17.23
Restaurant Brands International	$9.43 billion	2.66	$776.00 million	$3.72	19.34

Restaurant Brands International has higher revenue and earnings than Red Rock Resorts. Red Rock Resorts is trading at a lower price-to-earnings ratio than Restaurant Brands International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Red Rock Resorts and Restaurant Brands International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red Rock Resorts	8.43%	56.19%	4.01%
Restaurant Brands International	13.12%	33.43%	6.94%

Insider and Institutional Ownership

47.8% of Red Rock Resorts shares are held by institutional investors. Comparatively, 82.3% of Restaurant Brands International shares are held by institutional investors. 54.3% of Red Rock Resorts shares are held by insiders. Comparatively, 1.2% of Restaurant Brands International shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Red Rock Resorts pays an annual dividend of $1.04 per share and has a dividend yield of 2.1%. Restaurant Brands International pays an annual dividend of $2.60 per share and has a dividend yield of 3.6%. Red Rock Resorts pays out 36.7% of its earnings in the form of a dividend. Restaurant Brands International pays out 69.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Restaurant Brands International has raised its dividend for 10 consecutive years. Restaurant Brands International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Red Rock Resorts has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500. Comparatively, Restaurant Brands International has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.

Summary

Restaurant Brands International beats Red Rock Resorts on 10 of the 17 factors compared between the two stocks.

About Red Rock Resorts

Red Rock Resorts, Inc., through its interest in Station Casinos LLC, develops and operates casino and entertainment properties in the United States. The company owns and operates gaming and entertainment facilities, including Durango Casino & Resort and smaller casinos in the Las Vegas regional market. The company was formerly known as Station Casinos Corp. and changed its name to Red Rock Resorts, Inc. in January 2016. Red Rock Resorts, Inc. was founded in 1976 and is based in Las Vegas, Nevada.

About Restaurant Brands International

Restaurant Brands International Inc. operates as a quick-service restaurant company in Canada, the United States, and internationally. It operates through four segments: Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), and Firehouse Subs (FHS). The company owns and franchises TH chain of donut/coffee/tea restaurants that offer blend coffee, tea, and espresso-based hot and cold specialty drinks; and fresh baked goods, including donuts, Timbits, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps, soups, and other food products. It is also involved in owning and franchising BK, a fast-food hamburger restaurant chain, which offers flame-grilled hamburgers, chicken and other specialty sandwiches, French fries, soft drinks, and other food items; and PLK quick service restaurants that provide Louisiana-style fried chicken, chicken tenders, fried shrimp and other seafood, red beans and rice, and other regional items. In addition, the company owns and franchises FHS quick service restaurants that offer meats and cheese, chopped salads, chili and soups, signature and other sides, soft drinks, and local specialties. The company was founded in 1954 and is headquartered in Toronto, Canada.