Contrasting Compass Group (OTCMKTS:CMPGY) & Restaurant Brands International (NYSE:QSR)

Compass Group (OTCMKTS:CMPGY) and Restaurant Brands International (NYSE:QSR) are both large-cap retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, earnings, profitability and institutional ownership.

Profitability

This table compares Compass Group and Restaurant Brands International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Compass Group	N/A	N/A	N/A
Restaurant Brands International	9.96%	32.80%	6.67%

Valuation and Earnings

This table compares Compass Group and Restaurant Brands International”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Compass Group	$46.07 billion	1.09	$1.87 billion	N/A	N/A
Restaurant Brands International	$9.43 billion	2.93	$776.00 million	$2.84	28.07

Compass Group has higher revenue and earnings than Restaurant Brands International.

Dividends

Compass Group pays an annual dividend of $0.83 per share and has a dividend yield of 2.8%. Restaurant Brands International pays an annual dividend of $2.60 per share and has a dividend yield of 3.3%. Restaurant Brands International pays out 91.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Restaurant Brands International has increased its dividend for 10 consecutive years. Restaurant Brands International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Compass Group has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, Restaurant Brands International has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500.

Institutional and Insider Ownership

0.0% of Compass Group shares are held by institutional investors. Comparatively, 82.3% of Restaurant Brands International shares are held by institutional investors. 0.0% of Compass Group shares are held by insiders. Comparatively, 1.3% of Restaurant Brands International shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for Compass Group and Restaurant Brands International, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Group	0	0	2	2	3.50
Restaurant Brands International	1	9	16	0	2.58

Restaurant Brands International has a consensus target price of $83.33, suggesting a potential upside of 4.54%. Given Restaurant Brands International’s higher probable upside, analysts clearly believe Restaurant Brands International is more favorable than Compass Group.

Summary

Restaurant Brands International beats Compass Group on 10 of the 16 factors compared between the two stocks.

About Compass Group

Compass Group PLC operates as a food and support services company in North America, Europe, and internationally. The company offers support services, such as cleaning in hospitals; reception services at corporate headquarters; managing remote camps; grounds and facilities services at schools and universities; and others. It serves business and industry; healthcare and senior living market; education; sports and leisure; and defense, offshore, and remote sectors. Compass Group PLC was founded in 1941 and is based in Chertsey, the United Kingdom.

About Restaurant Brands International

Restaurant Brands International Inc. operates as a quick-service restaurant company in Canada, the United States, and internationally. It operates through four segments: Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), and Firehouse Subs (FHS). The company owns and franchises TH chain of donut/coffee/tea restaurants that offer blend coffee, tea, and espresso-based hot and cold specialty drinks; and fresh baked goods, including donuts, Timbits, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps, soups, and other food products. It is also involved in owning and franchising BK, a fast-food hamburger restaurant chain, which offers flame-grilled hamburgers, chicken and other specialty sandwiches, French fries, soft drinks, and other food items; and PLK quick service restaurants that provide Louisiana-style fried chicken, chicken tenders, fried shrimp and other seafood, red beans and rice, and other regional items. In addition, the company owns and franchises FHS quick service restaurants that offer meats and cheese, chopped salads, chili and soups, signature and other sides, soft drinks, and local specialties. The company was founded in 1954 and is headquartered in Toronto, Canada.