Papa John's Int'l (NASDAQ: PZZA) and The ONE Group Hospitality (NASDAQ:STKS) are both small-cap cyclical consumer goods & services companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, institutional ownership, risk and earnings.

Dividends

Papa John's Int'l pays an annual dividend of $0.90 per share and has a dividend yield of 1.6%. The ONE Group Hospitality does not pay a dividend. Papa John's Int'l pays out 31.0% of its earnings in the form of a dividend.

Risk & Volatility

Papa John's Int'l has a beta of 0.4, meaning that its share price is 60% less volatile than the S&P 500. Comparatively, The ONE Group Hospitality has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.

Institutional and Insider Ownership

84.2% of Papa John's Int'l shares are owned by institutional investors. Comparatively, 14.5% of The ONE Group Hospitality shares are owned by institutional investors. 27.7% of Papa John's Int'l shares are owned by company insiders. Comparatively, 35.9% of The ONE Group Hospitality shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Papa John's Int'l and The ONE Group Hospitality’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Papa John's Int'l $1.71 billion 1.16 $102.82 million $2.90 19.60
The ONE Group Hospitality $72.41 million 0.78 -$16.68 million ($0.80) -2.79

Papa John's Int'l has higher revenue and earnings than The ONE Group Hospitality. The ONE Group Hospitality is trading at a lower price-to-earnings ratio than Papa John's Int'l, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Papa John's Int'l and The ONE Group Hospitality’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Papa John's Int'l 5.25% N/A 16.89%
The ONE Group Hospitality -25.48% -68.30% -7.44%

Analyst Ratings

This is a summary of current ratings and recommmendations for Papa John's Int'l and The ONE Group Hospitality, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Papa John's Int'l 0 6 3 0 2.33
The ONE Group Hospitality 0 0 0 0 N/A

Papa John's Int'l presently has a consensus target price of $79.25, suggesting a potential upside of 39.40%. Given Papa John's Int'l’s higher probable upside, equities research analysts plainly believe Papa John's Int'l is more favorable than The ONE Group Hospitality.

Summary

Papa John's Int'l beats The ONE Group Hospitality on 11 of the 14 factors compared between the two stocks.

About Papa John's Int'l

Papa John’s International, Inc. (Papa John’s) operates and franchises pizza delivery and carryout restaurants and, in certain international markets, dine-in and delivery restaurants under the trademark Papa John’s. The Company operates through five segments: domestic Company-owned restaurants, North America commissaries, North America franchising, international operations and all other business units. North America is defined as the United States and Canada. Domestic is defined as the contiguous United States. International franchisees are defined as all franchise operations outside of the United States and Canada. As of December 25, 2016, there were 5,097 Papa John’s restaurants in operation, consisting of 744 Company-owned and 4,353 franchised restaurants operating domestically in all 50 states and in 45 countries and territories. It offers pizza along with side items, including breadsticks, cheesesticks, chicken poppers and wings, dessert items and canned or bottled beverages.

About The ONE Group Hospitality

The ONE Group Hospitality, Inc., formerly Committed Capital Acquisition Corporation, is a hospitality company. The Company develops, owns and operates restaurants and lounges, and provides food and beverage services for hospitality venues, including hotels, casinos and other locations across the globe. It operates through three segments: owned STK units (STKs), F&B hospitality management agreements (F&B), and Other concepts (Other). Its STKs segment consists of leased restaurant locations. Its F&B segment consists of management agreements, in which the Company operates the food and beverage services in hotels or casinos and could include an STK. Its Other segment includes owned non-STK leased locations. Its restaurant brand is STK, a multi-unit steakhouse concept with locations in metropolitan cities around the globe. Its F&B hospitality management services include developing, managing and operating restaurants, bars, rooftop lounges, pools, banqueting and catering facilities.

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