Papa John’s International (NASDAQ: PZZA) and Kona Grill (NASDAQ:KONA) are both cyclical consumer goods & services companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.
Earnings and Valuation
This table compares Papa John’s International and Kona Grill’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Papa John’s International||$1.71 billion||1.23||$102.82 million||$2.91||20.60|
|Kona Grill||$169.52 million||0.13||-$21.62 million||($2.67)||-0.79|
This table compares Papa John’s International and Kona Grill’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Papa John’s International||6.12%||4,321.08%||19.07%|
Volatility and Risk
Papa John’s International has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500. Comparatively, Kona Grill has a beta of 0.18, meaning that its stock price is 82% less volatile than the S&P 500.
Institutional and Insider Ownership
84.2% of Papa John’s International shares are owned by institutional investors. Comparatively, 37.2% of Kona Grill shares are owned by institutional investors. 27.7% of Papa John’s International shares are owned by company insiders. Comparatively, 29.2% of Kona Grill shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Papa John’s International pays an annual dividend of $0.90 per share and has a dividend yield of 1.5%. Kona Grill does not pay a dividend. Papa John’s International pays out 30.9% of its earnings in the form of a dividend.
This is a breakdown of recent ratings and target prices for Papa John’s International and Kona Grill, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Papa John’s International||0||6||3||0||2.33|
Papa John’s International currently has a consensus target price of $79.25, indicating a potential upside of 32.17%. Kona Grill has a consensus target price of $6.17, indicating a potential upside of 190.88%. Given Kona Grill’s stronger consensus rating and higher possible upside, analysts clearly believe Kona Grill is more favorable than Papa John’s International.
Papa John’s International beats Kona Grill on 10 of the 14 factors compared between the two stocks.
About Papa John’s International
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 Kona Grill
Kona Grill, Inc. owns and operates upscale casual dining restaurants under the name Kona Grill. The Company owns and operates approximately 40 restaurants in 20 states throughout the United States and Puerto Rico. Its high-volume upscale casual restaurants feature a global menu of contemporary American favorites and sushi. Its menu items are prepared from scratch at each restaurant location and incorporate over 40 signature sauces and dressings. It also offers a full service bar offering a range assortment of wines, specialty cocktails and beers. Its restaurants seat an average of approximately 290 customers and comprise multiple dining areas. Its dining area, full-service bar, indoor/outdoor patio and sushi bar provide a choice of atmospheres and a range of environments. It locates its restaurants in various areas, such as retail centers, shopping malls, urban entertainment districts and lifestyle centers that are situated near commercial office space and residential housing.
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