Head to Head Contrast: Planet Fitness (NYSE:PLNT) and Yum China (NYSE:YUMC)

Planet Fitness (NYSE:PLNT) and Yum China (NYSE:YUMC) are both consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of current ratings for Planet Fitness and Yum China, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Planet Fitness	1	9	11	1	2.55
Yum China	0	1	3	0	2.75

Planet Fitness currently has a consensus target price of $69.34, suggesting a potential upside of 32.47%. Yum China has a consensus target price of $59.21, suggesting a potential upside of 30.04%. Given Planet Fitness’ higher probable upside, research analysts clearly believe Planet Fitness is more favorable than Yum China.

Valuation & Earnings

This table compares Planet Fitness and Yum China”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Planet Fitness	$1.32 billion	2.99	$219.10 million	$2.95	17.74
Yum China	$11.80 billion	1.32	$929.00 million	$2.73	16.68

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

Insider and Institutional Ownership

95.5% of Planet Fitness shares are owned by institutional investors. Comparatively, 85.6% of Yum China shares are owned by institutional investors. 0.9% of Planet Fitness shares are owned by company insiders. Comparatively, 0.4% of Yum China shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Planet Fitness has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, Yum China has a beta of 0.07, meaning that its share price is 93% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Planet Fitness	16.88%	-59.46%	8.60%
Yum China	7.84%	15.82%	8.96%

Summary

Planet Fitness beats Yum China on 10 of the 15 factors compared between the two stocks.

About Planet Fitness

Planet Fitness, Inc., together with its subsidiaries, franchises and operates fitness centers under the Planet Fitness brand. The company operates through three segments: Franchise, Corporate-Owned Stores, and Equipment. The company is involved in franchising business in the United States, Puerto Rico, Canada, Panama, Mexico, and Australia. It engages in the sale of fitness equipment to franchisee-owned stores in the United States, Canada, and Mexico. In addition, the company operates corporate-owned stores in the United States and Canada. Planet Fitness, Inc. was founded in 1992 and is headquartered in Hampton, New Hampshire.

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.