Del Taco Restaurants (NASDAQ: TACO) and Popeyes Louisiana Kitchen (NASDAQ:PLKI) are both retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, risk and valuation.
Risk and Volatility
Del Taco Restaurants has a beta of -0.2, meaning that its stock price is 120% less volatile than the S&P 500. Comparatively, Popeyes Louisiana Kitchen has a beta of -0.11, meaning that its stock price is 111% less volatile than the S&P 500.
Institutional & Insider Ownership
69.9% of Del Taco Restaurants shares are held by institutional investors. Comparatively, 97.6% of Popeyes Louisiana Kitchen shares are held by institutional investors. 14.6% of Del Taco Restaurants shares are held by company insiders. Comparatively, 2.2% of Popeyes Louisiana Kitchen shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a breakdown of current ratings and target prices for Del Taco Restaurants and Popeyes Louisiana Kitchen, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Del Taco Restaurants||0||1||4||0||2.80|
|Popeyes Louisiana Kitchen||1||4||1||0||2.00|
Del Taco Restaurants currently has a consensus price target of $16.80, indicating a potential upside of 10.38%. Popeyes Louisiana Kitchen has a consensus price target of $69.75, indicating a potential downside of 11.68%. Given Del Taco Restaurants’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Del Taco Restaurants is more favorable than Popeyes Louisiana Kitchen.
Valuation & Earnings
This table compares Del Taco Restaurants and Popeyes Louisiana Kitchen’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Del Taco Restaurants||$468.58 million||1.26||$67.62 million||$0.56||27.18|
|Popeyes Louisiana Kitchen||N/A||N/A||N/A||$1.96||40.29|
Del Taco Restaurants has higher revenue and earnings than Popeyes Louisiana Kitchen. Del Taco Restaurants is trading at a lower price-to-earnings ratio than Popeyes Louisiana Kitchen, indicating that it is currently the more affordable of the two stocks.
This table compares Del Taco Restaurants and Popeyes Louisiana Kitchen’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Del Taco Restaurants||4.81%||5.90%||3.08%|
|Popeyes Louisiana Kitchen||15.08%||490.51%||15.48%|
Popeyes Louisiana Kitchen beats Del Taco Restaurants on 6 of the 11 factors compared between the two stocks.
Del Taco Restaurants Company Profile
Del Taco Restaurants, Inc. is an operator and franchisor of restaurants featuring made-to-order cuisine, including both Mexican inspired and American classic dishes. As of January 3, 2017, the Company operated 551 Del Taco restaurants. The Company’s menu offers a combination of Mexican-inspired food, such as tacos and burritos, and American classics, such as Double Del cheeseburgers, crinkle-cut fries and milkshakes. The Company’s menu features items, such as its Platos plated meals, Epic Burritos, Handcrafted Ensaladas and Fresca Bowls, as well as items on its Buck & Under Menu. As of January 3, 2017, the Company had 310 Company-operated and 241 franchise-operated restaurants. The Platos menu offering consists of individually plated meals complete with an entree, two sides, and chips and salsa. The Company’s menu also includes quesadillas, bowls and handcrafted ensaladas, as well as burgers and fries.
Popeyes Louisiana Kitchen Company Profile
Popeyes Louisiana Kitchen, Inc. (Popeyes) develops, operates and franchises quick-service restaurants (QSRs) under the trade names Popeyes Louisiana Kitchen and Popeyes Chicken & Biscuits. The Company conducts its operations through two segments: franchise operations and Company-operated restaurants. The Company-operated restaurant segment includes the operation of Company-owned restaurants. The franchise operations segment consists of domestic and international franchising activities. The Company’s Louisiana style menu features spicy chicken, chicken tenders, fried shrimp and other seafood, red beans and rice, and other regional items. As of December 25, 2016, the Company operated and franchised 2,688 Popeyes restaurants in 48 states, the District of Columbia, three territories and 25 foreign countries. As of December 25, 2016, of the 55 Company-operated restaurants, approximately 84% were concentrated in Louisiana, North Carolina and Tennessee.
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