Financial Review: Yum China (NYSE:YUMC) versus Portillo’s (NASDAQ:PTLO)

Yum China (NYSE:YUMC) and Portillo’s (NASDAQ:PTLO) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares Yum China and Portillo’s”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	1.47	$929.00 million	$2.51	19.58
Portillo’s	$732.07 million	0.57	$19.34 million	$0.27	20.59

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

Volatility & Risk

Yum China has a beta of 0.17, meaning that its stock price is 83% less volatile than the S&P 500. Comparatively, Portillo’s has a beta of 1.68, meaning that its stock price is 68% more volatile than the S&P 500.

Institutional and Insider Ownership

85.6% of Yum China shares are held by institutional investors. Comparatively, 98.3% of Portillo’s shares are held by institutional investors. 0.4% of Yum China shares are held by company insiders. Comparatively, 6.1% of Portillo’s shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Yum China and Portillo’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Yum China	7.87%	14.65%	8.48%
Portillo’s	2.64%	3.93%	1.24%

Analyst Ratings

This is a breakdown of current ratings and price targets for Yum China and Portillo’s, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Yum China	0	1	3	0	2.75
Portillo’s	1	9	3	0	2.15

Yum China presently has a consensus target price of $59.05, indicating a potential upside of 20.13%. Portillo’s has a consensus target price of $7.50, indicating a potential upside of 34.89%. Given Portillo’s’ higher probable upside, analysts plainly believe Portillo’s is more favorable than Yum China.

Summary

Yum China beats Portillo’s on 8 of the 13 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 Portillo’s

Portillo’s Inc. owns and operates fast casual restaurants in the United States. The company offers Chicago-style hot dogs and sausages, Italian beef sandwiches, char-grilled burgers, chopped salads, crinkle-cut French fries, homemade chocolate cakes, and chocolate cake shake. It offers its products through its website, application, and certain third-party platforms. Portillo’s Inc. was founded in 1963 and is based in Oak Brook, Illinois.