Analyzing Del Taco Restaurants (TACO) and Popeyes Louisiana Kitchen (PLKI)
Del Taco Restaurants (NASDAQ: TACO) and Popeyes Louisiana Kitchen (NASDAQ:PLKI) are both retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.
Insider and Institutional Ownership
69.9% of Del Taco Restaurants shares are owned by institutional investors. Comparatively, 97.6% of Popeyes Louisiana Kitchen shares are owned by institutional investors. 14.6% of Del Taco Restaurants 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, endowments and hedge funds believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Del Taco Restaurants and Popeyes Louisiana Kitchen’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Del Taco Restaurants||$452.08 million||1.08||$20.91 million||$0.56||22.59|
|Popeyes Louisiana Kitchen||N/A||N/A||N/A||$1.96||N/A|
Del Taco Restaurants has higher revenue and earnings than Popeyes Louisiana Kitchen. Popeyes Louisiana Kitchen is trading at a lower price-to-earnings ratio than Del Taco Restaurants, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Del Taco Restaurants has a beta of -0.27, indicating that its stock price is 127% less volatile than the S&P 500. Comparatively, Popeyes Louisiana Kitchen has a beta of -0.11, indicating that its stock price is 111% less volatile than the S&P 500.
This table compares Del Taco Restaurants and Popeyes Louisiana Kitchen’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Del Taco Restaurants||4.78%||5.89%||3.08%|
|Popeyes Louisiana Kitchen||15.08%||490.51%||15.48%|
This is a summary of current ratings and recommmendations for Del Taco Restaurants and Popeyes Louisiana Kitchen, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Del Taco Restaurants||0||1||4||0||2.80|
|Popeyes Louisiana Kitchen||1||4||1||0||2.00|
Del Taco Restaurants presently has a consensus target price of $16.40, suggesting a potential upside of 29.64%. Popeyes Louisiana Kitchen has a consensus target price of $69.75, suggesting a potential upside of Infinity. Given Popeyes Louisiana Kitchen’s higher possible upside, analysts clearly believe Popeyes Louisiana Kitchen is more favorable than Del Taco Restaurants.
Popeyes Louisiana Kitchen beats Del Taco Restaurants on 7 of the 11 factors compared between the two stocks.
About Del Taco Restaurants
Del Taco Restaurants, Inc. is an operator and franchisor of restaurants featuring made-to-order cuisine, including both Mexican inspired and American classic dishes. As of January 3, 2017, the Company operated 551 Del Taco restaurants. The Company’s menu offers a combination of Mexican-inspired food, such as tacos and burritos, and American classics, such as Double Del cheeseburgers, crinkle-cut fries and milkshakes. The Company’s menu features items, such as its Platos plated meals, Epic Burritos, Handcrafted Ensaladas and Fresca Bowls, as well as items on its Buck & Under Menu. As of January 3, 2017, the Company had 310 Company-operated and 241 franchise-operated restaurants. The Platos menu offering consists of individually plated meals complete with an entree, two sides, and chips and salsa. The Company’s menu also includes quesadillas, bowls and handcrafted ensaladas, as well as burgers and fries.
About Popeyes Louisiana Kitchen
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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