Jack In The Box (NASDAQ: JACK) and Sonic Corp. (NASDAQ:SONC) are both retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Profitability

This table compares Jack In The Box and Sonic Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Jack In The Box 8.51% -37.83% 10.39%
Sonic Corp. 13.23% -44.21% 9.71%

Risk and Volatility

Jack In The Box has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, Sonic Corp. has a beta of 1.77, indicating that its stock price is 77% 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 1.6%. Sonic Corp. pays an annual dividend of $0.56 per share and has a dividend yield of 2.3%. Jack In The Box pays out 36.7% of its earnings in the form of a dividend. Sonic Corp. pays out 37.3% 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.

Valuation and Earnings

This table compares Jack In The Box and Sonic Corp.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Jack In The Box $1.61 billion 1.78 $350.23 million $4.36 22.32
Sonic Corp. $515.82 million 2.00 $158.68 million $1.50 16.43

Jack In The Box has higher revenue and earnings than Sonic Corp.. Sonic Corp. is trading at a lower price-to-earnings ratio than Jack In The Box, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

94.9% of Jack In The Box shares are owned by institutional investors. 2.1% of Jack In The Box shares are owned by insiders. Comparatively, 6.2% of Sonic Corp. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Jack In The Box and Sonic Corp., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Jack In The Box 1 3 9 0 2.62
Sonic Corp. 1 7 5 0 2.31

Jack In The Box presently has a consensus price target of $114.92, suggesting a potential upside of 18.09%. Sonic Corp. has a consensus price target of $27.67, suggesting a potential upside of 12.28%. Given Jack In The Box’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Jack In The Box is more favorable than Sonic Corp..

Summary

Jack In The Box beats Sonic Corp. on 11 of the 16 factors compared between the two stocks.

Jack In The Box Company Profile

Jack in the Box Inc. operates and franchises Jack in the Box quick-service restaurants (QSRs) and Qdoba Mexican Eats (Qdoba) fast-casual restaurants. The Company operates in two segments: Jack in the Box and Qdoba restaurant operations. Qdoba is a fast-casual Mexican food brand in the United States, offering food items including burritos, tacos, salads, and quesadillas. Jack in the Box is a hamburger chain, which offers a selection of products, including classic burgers such as, Jumbo Jack burgers, and new product lines, such as Buttery Jack burgers, and its Brunchfast menu. As of October 2, 2016, the Company operated 2,954 Jack in the Box QSRs and Qdoba fast-casual restaurants. As of October 2, 2016, Jack in the Box system included 2,255restaurants, of which 417 were company-operated and 1,838 were franchise operated. As of October 2, 2016, the Qdoba system included 699 restaurants, of which 367 were company operated and 332 were franchise operated.

Sonic Corp. Company Profile

Sonic Corp. operates and franchises the chain of drive-thru restaurants (Sonic Drive-Ins) in the United States. As of August 31, 2016, 3,557 Sonic Drive-Ins were in operation from coast to coast in 45 states, consisting of 345 Company drive-thrus and 3,212 franchise drive-thrus. As of August 31, 2016, its restaurant design and construction consisted of a kitchen housed in a one-story building, which was approximately 1,500 square feet, flanked by canopy-covered rows of 16 to 24 parking spaces, with each space having its own payment terminal, intercom speaker system and menu board. At a Sonic Drive-In, a customer drives into one of the parking spaces, orders through the intercom speaker system and has the food delivered by a carhop and Sonic Drive-Ins also include a drive-thru lane and patio seating to provide customers with alternative dining options. Its food items include specialty drinks, such as cherry limeades and slushes, ice cream desserts and chicken sandwiches and hamburgers.

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