Carrols Restaurant Group (NASDAQ: TAST) and Domino’s Pizza (NYSE:DPZ) are both retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, dividends, valuation and profitability.

Insider & Institutional Ownership

86.8% of Carrols Restaurant Group shares are held by institutional investors. Comparatively, 94.3% of Domino’s Pizza shares are held by institutional investors. 5.3% of Carrols Restaurant Group shares are held by insiders. Comparatively, 3.6% of Domino’s Pizza shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Carrols Restaurant Group has a beta of 0.02, suggesting that its stock price is 98% less volatile than the S&P 500. Comparatively, Domino’s Pizza has a beta of 0.35, suggesting that its stock price is 65% less volatile than the S&P 500.

Valuation & Earnings

This table compares Carrols Restaurant Group and Domino’s Pizza’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Carrols Restaurant Group $999.03 million 0.38 $80.24 million $0.72 14.86
Domino’s Pizza $2.64 billion 3.27 $510.89 million $5.02 35.64

Domino’s Pizza has higher revenue and earnings than Carrols Restaurant Group. Carrols Restaurant Group is trading at a lower price-to-earnings ratio than Domino’s Pizza, indicating that it is currently the more affordable of the two stocks.

Dividends

Domino’s Pizza pays an annual dividend of $1.84 per share and has a dividend yield of 1.0%. Carrols Restaurant Group does not pay a dividend. Domino’s Pizza pays out 36.7% of its earnings in the form of a dividend. Domino’s Pizza has increased its dividend for 3 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and price targets for Carrols Restaurant Group and Domino’s Pizza, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carrols Restaurant Group 0 0 1 1 3.50
Domino’s Pizza 0 11 9 0 2.45

Carrols Restaurant Group presently has a consensus target price of $16.50, indicating a potential upside of 54.21%. Domino’s Pizza has a consensus target price of $193.27, indicating a potential upside of 8.01%. Given Carrols Restaurant Group’s stronger consensus rating and higher possible upside, research analysts plainly believe Carrols Restaurant Group is more favorable than Domino’s Pizza.

Profitability

This table compares Carrols Restaurant Group and Domino’s Pizza’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carrols Restaurant Group 3.44% 6.33% 1.86%
Domino’s Pizza 9.40% -13.28% 34.03%

Summary

Domino’s Pizza beats Carrols Restaurant Group on 11 of the 18 factors compared between the two stocks.

Carrols Restaurant Group Company Profile

Carrols Restaurant Group, Inc. is a holding company and conducts all of its operations through its subsidiary, Carrols Corporation (Carrols) and Carrols’ subsidiary, Carrols LLC. The Company is a restaurant company and Burger King franchisee in the United States. As of January 1, 2017, the Company had owned and operated 753 Burger King restaurants under the name Burger King in 16 Northeastern, Midwestern and Southeastern states. Burger King restaurants feature the flame-broiled Whopper sandwich, as well as a range of hamburgers, chicken and other specialty sandwiches, French fries, salads, breakfast items, hot dogs, snacks, smoothies, frappes and other offerings. The Company’s Burger King restaurants are located in various states, such as Illinois, Indiana, Kentucky, Maine, Massachusetts, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Vermont, Virginia and West Virginia.

Domino’s Pizza Company Profile

Domino’s Pizza, Inc. is a pizza restaurant chain company. As of January 1, 2017, the Company operated in over 13,800 locations in over 85 markets around the world. The Company operates through three segments: domestic stores, international franchise and supply chain. Its basic menu features pizza products in various sizes and crust types. As of January 1, 2017, its Domestic Stores segment consisted primarily of its franchise operations, which consisted of 4,979 franchised stores located in the contiguous United States. As of January 1, 2017, its International Franchise segment consisted of a network of franchised stores in over 85 international markets. As of January 1, 2017, its supply chain segment operated 18 regional dough manufacturing and food supply chain centers in the United States, one thin crust manufacturing center, one vegetable processing center and one center providing equipment and supplies to certain of its domestic and international stores.

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