Head-To-Head Contrast: Greene King (GKNGY) and Wendys (WEN)

Greene King (OTCMKTS: GKNGY) and Wendys (NASDAQ:WEN) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.

Analyst Ratings

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This is a summary of recent ratings for Greene King and Wendys, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Greene King 0 0 0 0 N/A
Wendys 1 8 11 0 2.50

Wendys has a consensus target price of $17.51, suggesting a potential upside of 2.85%. Given Wendys’ higher possible upside, analysts plainly believe Wendys is more favorable than Greene King.

Valuation & Earnings

This table compares Greene King and Wendys’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Greene King $2.87 billion 0.67 $196.23 million $1.83 6.78
Wendys $1.22 billion 3.33 $194.02 million $0.43 39.58

Greene King has higher revenue and earnings than Wendys. Greene King is trading at a lower price-to-earnings ratio than Wendys, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

80.6% of Wendys shares are owned by institutional investors. 26.5% of Wendys shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Greene King and Wendys’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Greene King N/A N/A N/A
Wendys 15.86% 21.24% 2.68%

Risk and Volatility

Greene King has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500. Comparatively, Wendys has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.

Dividends

Greene King pays an annual dividend of $0.87 per share and has a dividend yield of 7.0%. Wendys pays an annual dividend of $0.34 per share and has a dividend yield of 2.0%. Greene King pays out 47.5% of its earnings in the form of a dividend. Wendys pays out 79.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Greene King is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Wendys beats Greene King on 9 of the 14 factors compared between the two stocks.

Greene King Company Profile

Greene King plc operates as a pub retailer and brewer in the United Kingdom. The company operates through Pub Company, Pub Partners, and Brewing & Brands segments. Its retail brands and formats include Greene King Local Pubs, Hungry Horse, Flaming Grill, Farmhouse Inns, and Chef & Brewer. The company is also involved in brewing, marketing, and selling beer under the Greene King IPA, Old Speckled Hen, Abbot Ale, and Belhaven Best brands. In addition, Greene King plc engages in the employment, financing, pension trustee, and property businesses. It operates 2,924 pubs, restaurants, and hotels across England, Wales, and Scotland, including 1,769 retail pubs, restaurants, and hotels, and 1,155 tenanted, leased, and franchised pubs. Greene King plc was founded in 1799 and is headquartered in Bury St Edmunds, the United Kingdom.

Wendys Company Profile

The Wendy’s Company is the parent company of subsidiary holding company Wendy’s Restaurants, LLC (Wendy’s Restaurants). Wendy’s Restaurants is the parent company of Wendy’s International, LLC (Wendy’s), which is the owner and franchisor of the Wendy’s restaurant system in the United States. Wendy’s is a restaurant company specializing in the hamburger sandwich segment. Wendy’s is engaged in the business of operating, developing and franchising a system of restaurants serving food. The Company operated approximately 6,080 Wendy’s restaurants in operation in North America, as of January 1, 2017. Of these restaurants, 330 were operated by the Company and 5,768 by a total of 376 franchisees, as of January 1, 2017. In addition, as of January 1, 2017, there were 439 franchised Wendy’s restaurants in operation in 29 countries and territories other than North America. Wendy’s is also a partner in a restaurant real estate joint venture with a subsidiary of Restaurant Brands International Inc.

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