Sonic Corp. (NASDAQ: SONC) and CEC Entertainment (NYSE:CEC) are both small-cap retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, analyst recommendations and risk.
Volatility and Risk
Sonic Corp. has a beta of 1.75, meaning that its stock price is 75% more volatile than the S&P 500. Comparatively, CEC Entertainment has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500.
Earnings & Valuation
This table compares Sonic Corp. and CEC Entertainment’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Sonic Corp.||$477.27 million||2.03||$63.66 million||$1.47||16.40|
Sonic Corp. has higher revenue and earnings than CEC Entertainment. CEC Entertainment is trading at a lower price-to-earnings ratio than Sonic Corp., indicating that it is currently the more affordable of the two stocks.
This table compares Sonic Corp. and CEC Entertainment’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Sonic Corp. pays an annual dividend of $0.64 per share and has a dividend yield of 2.7%. CEC Entertainment does not pay a dividend. Sonic Corp. pays out 43.5% of its earnings in the form of a dividend.
This is a summary of current recommendations and price targets for Sonic Corp. and CEC Entertainment, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Sonic Corp. currently has a consensus target price of $27.82, suggesting a potential upside of 15.38%.
Sonic Corp. beats CEC Entertainment on 6 of the 9 factors compared between the two stocks.
About Sonic Corp.
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.
About CEC Entertainment
CEC Entertainment, Inc. is engaged in the family dining and entertainment center business. The Company develops, operates and franchises family dining and entertainment centers under the name Chuck E. Cheese’s. Chuck E. Cheese’s stores feature musical and comic entertainment by robotic and animated characters, arcade-style and skill-oriented games, video games, rides and other activities. All of its stores offer dining selections consisting of a range of beverages, pizzas, sandwiches, appetizers, a salad bar and desserts. As of January 1, 2012, the Company and its franchisees operated a total of 556 Chuck E. Cheese’s stores. As of January 1, 2012, it operated 507 Company-owned Chuck E. Cheese’s stores located in 44 states and Canada and its franchisees operated a total of 49 stores located in 15 states, Puerto Rico, Guam, Guatemala, Chile, Saudi Arabia and the United Arab Emirates. In February 2014, Apollo Global Management, LLC completed the acquisition of CEC Entertainment Inc.
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