Critical Contrast: BJ’s Restaurants (NASDAQ:BJRI) vs. Yum China (NASDAQ:YUMC)
BJ’s Restaurants (NASDAQ:BJRI) and Yum China (NYSE:YUMC) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, profitability, analyst recommendations, dividends and risk.
This table compares BJ’s Restaurants and Yum China’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
BJ’s Restaurants pays an annual dividend of $0.48 per share and has a dividend yield of 1.3%. Yum China pays an annual dividend of $0.48 per share and has a dividend yield of 1.1%. BJ’s Restaurants pays out 20.4% of its earnings in the form of a dividend. Yum China pays out 31.4% 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. BJ’s Restaurants is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of recent recommendations and price targets for BJ’s Restaurants and Yum China, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
BJ’s Restaurants presently has a consensus target price of $49.86, suggesting a potential upside of 39.07%. Yum China has a consensus target price of $51.32, suggesting a potential upside of 16.33%. Given BJ’s Restaurants’ higher probable upside, equities analysts clearly believe BJ’s Restaurants is more favorable than Yum China.
Insider and Institutional Ownership
81.9% of Yum China shares are owned by institutional investors. 2.3% of BJ’s Restaurants shares are owned by company insiders. Comparatively, 0.4% of Yum China shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Risk and Volatility
BJ’s Restaurants has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, Yum China has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.
Earnings and Valuation
This table compares BJ’s Restaurants and Yum China’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|BJ’s Restaurants||$1.12 billion||0.66||$50.81 million||$2.35||15.26|
|Yum China||$8.42 billion||1.98||$708.00 million||$1.53||28.83|
Yum China has higher revenue and earnings than BJ’s Restaurants. BJ’s Restaurants is trading at a lower price-to-earnings ratio than Yum China, indicating that it is currently the more affordable of the two stocks.
Yum China beats BJ’s Restaurants on 10 of the 16 factors compared between the two stocks.
About BJ’s Restaurants
BJ's Restaurants, Inc. owns and operates casual dining restaurants in the United States. Its restaurants offer pizzas, craft and other beers, appetizers, entrées, pastas, sandwiches, specialty salads, and desserts. As of April 16, 2019, the company owned and operated 204 casual dining restaurants that offer dine-in, take-out, delivery, and party catering services in 27 states of Alabama, Arizona, Arkansas, California, Colorado, Florida, Indiana, Kansas, Kentucky, Louisiana, Maryland, Michigan, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, and Washington. BJ's Restaurants, Inc. was founded in 1978 and is based in Huntington Beach, California.
About Yum China
Yum China Holdings, Inc. owns, operates, and franchises restaurants in China. The company operates in two segments, KFC and Pizza Hut. It operates restaurants under the KFC, Pizza Hut, Taco Bell, East Dawning, Little Sheep, and COFFii & JOY brands, which specialize in chicken, pizza, hot pot cooking, Chinese food, Mexican-style food, and coffee categories. The company also provides online food delivery services. As of December 31, 2018, it operated approximately 5,900 KFC restaurants; 2,200 Pizza Hut restaurants; 280 Little Sheep units; 14 East Dawning restaurants; 4 Taco Bell restaurants; and 13 COFFii & JOY units. Yum China Holdings, Inc. was incorporated in 2016 and is headquartered in Shanghai, the People's Republic of China.
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