Analyzing Wendy’s Company (The) (WEN) and Popeyes Louisiana Kitchen (PLKI)
Wendy’s Company (The) (NASDAQ: WEN) and Popeyes Louisiana Kitchen (NASDAQ:PLKI) are both retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, valuation, earnings and profitabiliy.
Risk & Volatility
Wendy’s Company (The) has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500. Comparatively, Popeyes Louisiana Kitchen has a beta of -0.11, suggesting that its stock price is 111% less volatile than the S&P 500.
This is a breakdown of recent ratings and recommmendations for Wendy’s Company (The) and Popeyes Louisiana Kitchen, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Wendy’s Company (The)||0||8||7||0||2.47|
|Popeyes Louisiana Kitchen||1||5||1||0||2.00|
Wendy’s Company (The) presently has a consensus price target of $15.46, suggesting a potential downside of 2.14%. Popeyes Louisiana Kitchen has a consensus price target of $67.00, suggesting a potential downside of 15.16%. Given Wendy’s Company (The)’s stronger consensus rating and higher probable upside, research analysts plainly believe Wendy’s Company (The) is more favorable than Popeyes Louisiana Kitchen.
Wendy’s Company (The) pays an annual dividend of $0.28 per share and has a dividend yield of 1.8%. Popeyes Louisiana Kitchen does not pay a dividend. Wendy’s Company (The) pays out 58.3% of its earnings in the form of a dividend.
Insider and Institutional Ownership
77.8% of Wendy’s Company (The) shares are owned by institutional investors. Comparatively, 97.6% of Popeyes Louisiana Kitchen shares are owned by institutional investors. 26.5% of Wendy’s Company (The) 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 stock is poised for long-term growth.
Earnings & Valuation
This table compares Wendy’s Company (The) and Popeyes Louisiana Kitchen’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Wendy’s Company (The)||$1.34 billion||2.89||$371.36 million||$0.48||32.92|
|Popeyes Louisiana Kitchen||N/A||N/A||N/A||$1.96||40.29|
Wendy’s Company (The) has higher revenue and earnings than Popeyes Louisiana Kitchen. Wendy’s Company (The) is trading at a lower price-to-earnings ratio than Popeyes Louisiana Kitchen, indicating that it is currently the more affordable of the two stocks.
This table compares Wendy’s Company (The) and Popeyes Louisiana Kitchen’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Wendy’s Company (The)||9.43%||16.31%||2.45%|
|Popeyes Louisiana Kitchen||15.08%||490.51%||15.48%|
Wendy’s Company (The) beats Popeyes Louisiana Kitchen on 7 of the 13 factors compared between the two stocks.
About Wendy’s Company (The)
The Wendy’s Company is the parent company of subsidiary holding company Wendy’s Restaurants, LLC (Wendy’s Restaurants). Wendy’s Restaurants is the parent company of Wendy’s International, LLC (Wendy’s), which is the owner and franchisor of the Wendy’s restaurant system in the United States. Wendy’s is a restaurant company specializing in the hamburger sandwich segment. Wendy’s is engaged in the business of operating, developing and franchising a system of restaurants serving food. The Company operated approximately 6,080 Wendy’s restaurants in operation in North America, as of January 1, 2017. Of these restaurants, 330 were operated by the Company and 5,768 by a total of 376 franchisees, as of January 1, 2017. In addition, as of January 1, 2017, there were 439 franchised Wendy’s restaurants in operation in 29 countries and territories other than North America. Wendy’s is also a partner in a restaurant real estate joint venture with a subsidiary of Restaurant Brands International Inc.
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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