Sonic Corp. (NASDAQ: SONC) is one of 22 publicly-traded companies in the “Quick Service Restaurants” industry, but how does it weigh in compared to its rivals? We will compare Sonic Corp. to related businesses based on the strength of its dividends, earnings, profitability, valuation, analyst recommendations, risk and institutional ownership.
Risk and Volatility
Sonic Corp. has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500. Comparatively, Sonic Corp.’s rivals have a beta of 0.53, indicating that their average share price is 47% less volatile than the S&P 500.
Insider and Institutional Ownership
79.7% of shares of all “Quick Service Restaurants” companies are owned by institutional investors. 6.2% of Sonic Corp. shares are owned by company insiders. Comparatively, 16.8% of shares of all “Quick Service Restaurants” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Sonic Corp. pays an annual dividend of $0.56 per share and has a dividend yield of 2.2%. Sonic Corp. pays out 38.1% of its earnings in the form of a dividend. As a group, “Quick Service Restaurants” companies pay a dividend yield of 1.5% and pay out 42.7% of their earnings in the form of a dividend. Sonic Corp. is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.
Valuation and Earnings
This table compares Sonic Corp. and its rivals revenue, earnings per share (EPS) and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|Sonic Corp.||$477.27 million||$159.99 million||17.09|
|Sonic Corp. Competitors||$3.06 billion||$847.58 million||29.70|
Sonic Corp.’s rivals have higher revenue and earnings than Sonic Corp.. Sonic Corp. is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.
This is a summary of recent recommendations and price targets for Sonic Corp. and its rivals, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Sonic Corp. Competitors||251||1357||1668||81||2.47|
Sonic Corp. presently has a consensus price target of $27.75, indicating a potential upside of 10.47%. As a group, “Quick Service Restaurants” companies have a potential upside of 6.43%. Given Sonic Corp.’s higher possible upside, equities analysts plainly believe Sonic Corp. is more favorable than its rivals.
This table compares Sonic Corp. and its rivals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Sonic Corp. Competitors||6.90%||13.12%||9.54%|
Sonic Corp. rivals beat Sonic Corp. on 9 of the 15 factors compared.
Sonic Corp. Company Profile
Sonic Corp. operates and franchises the chain of drive-thru restaurants (Sonic Drive-Ins) in the United States. As of August 31, 2016, 3,557 Sonic Drive-Ins were in operation from coast to coast in 45 states, consisting of 345 Company drive-thrus and 3,212 franchise drive-thrus. As of August 31, 2016, its restaurant design and construction consisted of a kitchen housed in a one-story building, which was approximately 1,500 square feet, flanked by canopy-covered rows of 16 to 24 parking spaces, with each space having its own payment terminal, intercom speaker system and menu board. At a Sonic Drive-In, a customer drives into one of the parking spaces, orders through the intercom speaker system and has the food delivered by a carhop and Sonic Drive-Ins also include a drive-thru lane and patio seating to provide customers with alternative dining options. Its food items include specialty drinks, such as cherry limeades and slushes, ice cream desserts and chicken sandwiches and hamburgers.
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