Wendy’s Company (The) (WEN) and Popeyes Louisiana Kitchen (PLKI) Head to Head Comparison

Wendy’s Company (The) (NASDAQ: WEN) and Popeyes Louisiana Kitchen (NASDAQ:PLKI) are both retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitabiliy, earnings, dividends, risk and valuation.

Profitability

This table compares Wendy’s Company (The) and Popeyes Louisiana Kitchen’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wendy’s Company (The)	9.43%	16.31%	2.45%
Popeyes Louisiana Kitchen	15.08%	490.51%	15.48%

Analyst Recommendations

This is a breakdown of recent ratings for Wendy’s Company (The) and Popeyes Louisiana Kitchen, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wendy’s Company (The)	0	9	7	0	2.44
Popeyes Louisiana Kitchen	1	5	1	0	2.00

Wendy’s Company (The) presently has a consensus price target of $14.79, suggesting a potential downside of 6.30%. Popeyes Louisiana Kitchen has a consensus price target of $67.00, suggesting a potential downside of 15.16%. Given Wendy’s Company (The)’s stronger consensus rating and higher probable upside, analysts plainly believe Wendy’s Company (The) is more favorable than Popeyes Louisiana Kitchen.

Insider & Institutional Ownership

77.4% of Wendy’s Company (The) shares are held by institutional investors. Comparatively, 97.6% of Popeyes Louisiana Kitchen shares are held by institutional investors. 22.7% of Wendy’s Company (The) shares are held by insiders. Comparatively, 2.2% of Popeyes Louisiana Kitchen shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Wendy’s Company (The) has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500. Comparatively, Popeyes Louisiana Kitchen has a beta of -0.11, meaning that its share price is 111% less volatile than the S&P 500.

Earnings & Valuation

This table compares Wendy’s Company (The) and Popeyes Louisiana Kitchen’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Wendy’s Company (The)	$1.34 billion	2.89	$371.36 million	$0.48	32.88
Popeyes Louisiana Kitchen	N/A	N/A	N/A	$1.96	40.29

Wendy’s Company (The) has higher revenue and earnings than Popeyes Louisiana Kitchen. Wendy’s Company (The) 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.

Dividends

Wendy’s Company (The) pays an annual dividend of $0.28 per share and has a dividend yield of 1.8%. Popeyes Louisiana Kitchen does not pay a dividend. Wendy’s Company (The) pays out 58.3% of its earnings in the form of a dividend.

Summary

Wendy’s Company (The) beats Popeyes Louisiana Kitchen on 7 of the 13 factors compared between the two stocks.

About Wendy’s Company (The)

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.

About Popeyes Louisiana Kitchen

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.