Potbelly Corporation (PBPB) & Aramark (ARMK) Critical Analysis
Potbelly Corporation (NASDAQ: PBPB) and Aramark (NYSE:ARMK) are both retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitabiliy, valuation and institutional ownership.
Risk and Volatility
Potbelly Corporation has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500. Comparatively, Aramark has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500.
This table compares Potbelly Corporation and Aramark’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings and price targets for Potbelly Corporation and Aramark, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Potbelly Corporation presently has a consensus target price of $13.00, suggesting a potential upside of 10.64%. Aramark has a consensus target price of $42.78, suggesting a potential upside of 4.29%. Given Potbelly Corporation’s higher probable upside, equities analysts plainly believe Potbelly Corporation is more favorable than Aramark.
Institutional & Insider Ownership
73.9% of Potbelly Corporation shares are held by institutional investors. Comparatively, 95.4% of Aramark shares are held by institutional investors. 9.6% of Potbelly Corporation shares are held by company insiders. Comparatively, 2.9% of Aramark shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Potbelly Corporation and Aramark’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Potbelly Corporation||$412.88 million||0.71||$41.97 million||$0.31||37.90|
|Aramark||$14.49 billion||0.69||$1.30 billion||$1.29||31.80|
Aramark has higher revenue and earnings than Potbelly Corporation. Aramark is trading at a lower price-to-earnings ratio than Potbelly Corporation, indicating that it is currently the more affordable of the two stocks.
Aramark pays an annual dividend of $0.41 per share and has a dividend yield of 1.0%. Potbelly Corporation does not pay a dividend. Aramark pays out 31.8% of its earnings in the form of a dividend. Aramark has raised its dividend for 2 consecutive years.
Aramark beats Potbelly Corporation on 11 of the 18 factors compared between the two stocks.
Potbelly Corporation Company Profile
Potbelly Corporation owns and operates Potbelly Sandwich Works sandwich shops in the United States. The Company has domestic and international franchise operations of Potbelly Sandwich Works sandwich shops. As of December 25, 2016, the Company operated Potbelly Sandwich Works sandwich shops in 29 states and the District of Columbia. As of December 25, 2016, the Company had a domestic base of 441 shops in 29 states and the District of Columbia. Of these, the company operated 411 shops, and franchisees operated 30 shops, as of December 25, 2016. As of December 25, 2016, the Company had 13 international franchised shops, which included 11 shops in the Middle East, a shop in the United Kingdom and a shop in Canada. As of December 25, 2016, the Company had domestic franchise shops in Arkansas, Iowa, Illinois, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, South Dakota, Tennessee, Texas and Virginia.
Aramark Company Profile
Aramark is a global provider of food, facilities and uniform services to education, healthcare, business and industry, and sports, leisure and corrections clients. The Company operates through three segments: Food and Support Services North America (FSS North America), Food and Support Services International (FSS International), and Uniform and Career Apparel (Uniform). FSS North America and FSS International segments include food, refreshment, specialized dietary and support services, including facility maintenance and housekeeping, provided to business, educational and healthcare institutions and in sports, leisure and other facilities. The Uniform segment includes rental, sale, cleaning, maintenance and delivery of personalized uniforms and other textile items to clients in a range of industries in the United States, Puerto Rico, Japan and Canada, including manufacturing, transportation, construction, restaurants and hotels, healthcare and pharmaceutical industries.
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