Yum China Holdings (NASDAQ: YUMC) and Carrols Restaurant Group (NASDAQ:TAST) are both cyclical consumer goods & services companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, analyst recommendations, valuation and profitability.
Earnings & Valuation
This table compares Yum China Holdings and Carrols Restaurant Group’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Yum China Holdings | $6.75 billion | 2.06 | $1.06 billion | N/A | N/A |
| Carrols Restaurant Group | $999.03 million | 0.39 | $80.24 million | $0.72 | 15.35 |
Yum China Holdings has higher revenue and earnings than Carrols Restaurant Group.
Insider and Institutional Ownership
85.0% of Carrols Restaurant Group shares are held by institutional investors. 5.3% of Carrols Restaurant Group shares are held by company 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.
Profitability
This table compares Yum China Holdings and Carrols Restaurant Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Yum China Holdings | 7.09% | 16.35% | 11.33% |
| Carrols Restaurant Group | 3.44% | 6.33% | 1.86% |
Analyst Ratings
This is a summary of current ratings and price targets for Yum China Holdings and Carrols Restaurant Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Yum China Holdings | 1 | 5 | 4 | 0 | 2.30 |
| Carrols Restaurant Group | 0 | 0 | 1 | 1 | 3.50 |
Yum China Holdings presently has a consensus price target of $37.35, indicating a potential upside of 2.97%. Carrols Restaurant Group has a consensus price target of $16.50, indicating a potential upside of 49.32%. Given Carrols Restaurant Group’s stronger consensus rating and higher probable upside, analysts plainly believe Carrols Restaurant Group is more favorable than Yum China Holdings.
Summary
Yum China Holdings beats Carrols Restaurant Group on 8 of the 13 factors compared between the two stocks.
About Yum China Holdings
Yum China Holdings, Inc. is a restaurant company. The Company’s segments include KFC, Pizza Hut Casual Dining, and All Other Segments, including Pizza Hut Home Service, East Dawning, Little Sheep and Taco Bell. As of December 31, 2016, the Company had over 7,500 restaurants in China. Its restaurant base consists of various restaurant concepts. The Company’s restaurants in each of its concept offer consumers the ability to dine in and/or carry out food. In addition, KFC, Pizza Hut Casual Dining, Pizza Hut Home Service and East Dawning offer delivery service. KFC is the quick-service restaurant (QSR) brand. Pizza Hut Casual Dining is the casual dining restaurant (CDR) brand. As of December 31, 2016, the Company had over 360 Pizza Hut Home Service units in over 50 cities in China. The Little Sheep concept specializes in Hot Pot cooking. East Dawning is a Chinese food QSR brand. Taco Bell is a QSR brand specializing in Mexican-style food.
About Carrols Restaurant Group
Carrols Restaurant Group, Inc. is a holding company and conducts all of its operations through its subsidiary, Carrols Corporation (Carrols) and Carrols’ subsidiary, Carrols LLC. The Company is a restaurant company and Burger King franchisee in the United States. As of January 1, 2017, the Company had owned and operated 753 Burger King restaurants under the name Burger King in 16 Northeastern, Midwestern and Southeastern states. Burger King restaurants feature the flame-broiled Whopper sandwich, as well as a range of hamburgers, chicken and other specialty sandwiches, French fries, salads, breakfast items, hot dogs, snacks, smoothies, frappes and other offerings. The Company’s Burger King restaurants are located in various states, such as Illinois, Indiana, Kentucky, Maine, Massachusetts, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Vermont, Virginia and West Virginia.
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