Red Robin Gourmet Burgers (NASDAQ:RRGB) and Yum China (NYSE:YUMC) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.
Insider and Institutional Ownership
82.7% of Yum China shares are owned by institutional investors. 2.7% of Red Robin Gourmet Burgers shares are owned by insiders. Comparatively, 0.4% of Yum China shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares Red Robin Gourmet Burgers and Yum China’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Red Robin Gourmet Burgers||1.01%||7.20%||3.15%|
This is a summary of current ratings for Red Robin Gourmet Burgers and Yum China, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Red Robin Gourmet Burgers||0||7||4||0||2.36|
Red Robin Gourmet Burgers presently has a consensus target price of $51.55, suggesting a potential upside of 60.58%. Yum China has a consensus target price of $42.75, suggesting a potential upside of 19.58%. Given Red Robin Gourmet Burgers’ stronger consensus rating and higher possible upside, equities analysts clearly believe Red Robin Gourmet Burgers is more favorable than Yum China.
Volatility and Risk
Red Robin Gourmet Burgers has a beta of 0.28, suggesting that its share price is 72% less volatile than the S&P 500. Comparatively, Yum China has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500.
Yum China pays an annual dividend of $0.40 per share and has a dividend yield of 1.1%. Red Robin Gourmet Burgers does not pay a dividend. Yum China pays out 28.2% of its earnings in the form of a dividend.
Valuation and Earnings
This table compares Red Robin Gourmet Burgers and Yum China’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Red Robin Gourmet Burgers||$1.38 billion||0.30||$30.01 million||$2.49||12.89|
|Yum China||$7.14 billion||1.92||$403.00 million||$1.42||25.18|
Yum China has higher revenue and earnings than Red Robin Gourmet Burgers. Red Robin Gourmet Burgers is trading at a lower price-to-earnings ratio than Yum China, indicating that it is currently the more affordable of the two stocks.
Yum China beats Red Robin Gourmet Burgers on 10 of the 16 factors compared between the two stocks.
Red Robin Gourmet Burgers Company Profile
Red Robin Gourmet Burgers, Inc., together with its subsidiaries, develops, operates, and franchises full-service and casual-dining restaurants in the United States and Canada. As of December 31, 2017, it operated 480 company-owned restaurants located in 39 states and 2 Canadian provinces; and had 86 casual-dining restaurants operated by franchisees in 15 states. The company was founded in 1969 and is headquartered in Greenwood Village, Colorado.
Yum China Company Profile
Yum China Holdings, Inc. owns, operates, and franchises restaurants in China. The company operates in two segments, KFC and Pizza Hut. It operates restaurants under the KFC, Pizza Hut, Taco Bell, East Dawning, and Little Sheep brands, which specialize in chicken, pizza, hot pot cooking, Chinese food, and Mexican-style food categories. The company also provides online food delivery services. As of December 31, 2017, it operated approximately 5,400 KFC restaurants; 2,100 Pizza Hut restaurants; 280 Little Sheep units; 10 East Dawning restaurants; and 3 Taco Bell restaurants. Yum China Holdings, Inc. was incorporated in 2016 and is headquartered in Shanghai, the People's Republic of China.
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