Yum China (NYSE:YUMC) & Planet Fitness (NYSE:PLNT) Critical Comparison

Yum China (NYSE:YUMC) and Planet Fitness (NYSE:PLNT) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, analyst recommendations, valuation and profitability.

Analyst Ratings

This is a breakdown of recent recommendations for Yum China and Planet Fitness, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Yum China	0	1	3	0	2.75
Planet Fitness	1	9	11	1	2.55

Yum China currently has a consensus target price of $59.21, indicating a potential upside of 30.04%. Planet Fitness has a consensus target price of $69.34, indicating a potential upside of 32.47%. Given Planet Fitness’ higher possible upside, analysts clearly believe Planet Fitness is more favorable than Yum China.

Valuation and Earnings

This table compares Yum China and Planet Fitness”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Yum China	$11.80 billion	1.32	$929.00 million	$2.73	16.68
Planet Fitness	$1.32 billion	2.99	$219.10 million	$2.95	17.74

Yum China has higher revenue and earnings than Planet Fitness. Yum China is trading at a lower price-to-earnings ratio than Planet Fitness, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Yum China has a beta of 0.07, indicating that its share price is 93% less volatile than the S&P 500. Comparatively, Planet Fitness has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.

Institutional and Insider Ownership

85.6% of Yum China shares are owned by institutional investors. Comparatively, 95.5% of Planet Fitness shares are owned by institutional investors. 0.4% of Yum China shares are owned by company insiders. Comparatively, 0.9% of Planet Fitness shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Yum China and Planet Fitness’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Yum China	7.84%	15.82%	8.96%
Planet Fitness	16.88%	-59.46%	8.60%

Summary

Planet Fitness beats Yum China on 10 of the 15 factors compared between the two stocks.

About Yum China

Yum China Holdings, Inc. owns, operates, and franchises restaurants in the People's Republic of China. The company operates through KFC, Pizza Hut, and All Other segments. It operates restaurants under the KFC, Pizza Hut, Taco Bell, Lavazza, Little Sheep, and Huang Ji Huang concepts. The company also operates V-Gold Mall, a mobile e-commerce platform to sell products; and offers online food deliver services. Yum China Holdings, Inc. was founded in 1987 and is headquartered in Shanghai, the People's Republic of China.

About Planet Fitness

Planet Fitness, Inc., together with its subsidiaries, franchises and operates fitness centers under the Planet Fitness brand. The company operates through three segments: Franchise, Corporate-Owned Stores, and Equipment. The company is involved in franchising business in the United States, Puerto Rico, Canada, Panama, Mexico, and Australia. It engages in the sale of fitness equipment to franchisee-owned stores in the United States, Canada, and Mexico. In addition, the company operates corporate-owned stores in the United States and Canada. Planet Fitness, Inc. was founded in 1992 and is headquartered in Hampton, New Hampshire.