Jack in the Box (NASDAQ:JACK) and Restaurant Brands International (NYSE:QSR) are both retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, earnings, profitability and institutional ownership.

Earnings & Valuation

This table compares Jack in the Box and Restaurant Brands International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Jack in the Box $869.69 million 2.44 $121.37 million $3.79 21.69
Restaurant Brands International $5.36 billion 3.26 $612.00 million $2.63 26.14

Restaurant Brands International has higher revenue and earnings than Jack in the Box. Jack in the Box 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.

Institutional & Insider Ownership

95.5% of Jack in the Box shares are held by institutional investors. Comparatively, 84.1% of Restaurant Brands International shares are held by institutional investors. 2.3% of Jack in the Box shares are held by company insiders. Comparatively, 3.8% of Restaurant Brands International shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Jack in the Box has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500. Comparatively, Restaurant Brands International has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500.

Dividends

Jack in the Box pays an annual dividend of $1.60 per share and has a dividend yield of 1.9%. Restaurant Brands International pays an annual dividend of $2.00 per share and has a dividend yield of 2.9%. Jack in the Box pays out 42.2% of its earnings in the form of a dividend. Restaurant Brands International pays out 76.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of current recommendations for Jack in the Box and Restaurant Brands International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Jack in the Box 0 5 6 0 2.55
Restaurant Brands International 1 4 12 0 2.65

Jack in the Box presently has a consensus target price of $92.50, suggesting a potential upside of 12.52%. Restaurant Brands International has a consensus target price of $70.01, suggesting a potential upside of 1.81%. Given Jack in the Box’s higher possible upside, research analysts clearly believe Jack in the Box is more favorable than Restaurant Brands International.

Profitability

This table compares Jack in the Box and Restaurant Brands International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Jack in the Box 13.85% -19.41% 13.17%
Restaurant Brands International 11.16% 29.58% 5.70%

Summary

Restaurant Brands International beats Jack in the Box on 10 of the 16 factors compared between the two stocks.

About Jack in the Box

Jack in the Box Inc. operates and franchises Jack in the Box quick-service restaurants. As of April 15, 2018, it operated and franchised 2,245 Jack in the Box restaurants primarily in the western and southern United States and Guam. The company was founded in 1951 and is headquartered in San Diego, California.

About Restaurant Brands International

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, 2018, the company owned or franchised a total of 4,846 TH restaurants, 17,796 BK restaurants, and 3,102 PLK restaurants in approximately 100 countries worldwide and U.S. territories. Restaurant Brands International Inc. was founded in 1954 and is headquartered in Toronto, Canada.

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