Critical Survey: Biglari Holdings (BH) vs. Papa John’s International (PZZA)

Biglari Holdings (NYSE: BH) and Papa John’s International (NASDAQ:PZZA) are both retail/wholesale companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, risk, earnings and institutional ownership.

Insider and Institutional Ownership

89.0% of Biglari Holdings shares are held by institutional investors. Comparatively, 83.8% of Papa John’s International shares are held by institutional investors. 51.2% of Biglari Holdings shares are held by insiders. Comparatively, 27.7% of Papa John’s International shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for Biglari Holdings and Papa John’s International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Biglari Holdings 0 1 0 0 2.00
Papa John’s International 0 3 4 0 2.57

Papa John’s International has a consensus price target of $90.17, indicating a potential upside of 22.51%. Given Papa John’s International’s stronger consensus rating and higher possible upside, analysts plainly believe Papa John’s International is more favorable than Biglari Holdings.

Risk and Volatility

Biglari Holdings has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500. Comparatively, Papa John’s International has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500.

Valuation & Earnings

This table compares Biglari Holdings and Papa John’s International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Biglari Holdings $839.07 million 0.76 $43.14 million $12.92 23.79
Papa John’s International $1.75 billion 1.53 $198.59 million $2.87 25.64

Papa John’s International has higher revenue and earnings than Biglari Holdings. Biglari Holdings is trading at a lower price-to-earnings ratio than Papa John’s International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Biglari Holdings and Papa John’s International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Biglari Holdings 1.92% 3.15% 1.52%
Papa John’s International 6.13% 919.82% 19.48%

Dividends

Papa John’s International pays an annual dividend of $0.90 per share and has a dividend yield of 1.2%. Biglari Holdings does not pay a dividend. Papa John’s International pays out 31.4% of its earnings in the form of a dividend.

Summary

Papa John’s International beats Biglari Holdings on 12 of the 16 factors compared between the two stocks.

Biglari Holdings Company Profile

Biglari Holdings Inc. is a holding company owning subsidiaries engaged in various business activities, including media, property and casualty insurance, and restaurants The Company’s segments include Restaurant Operations, First Guard, Maxim, Other and Corporate. The Company’s restaurant operations’ activities are conducted through approximately two restaurant concepts operated by subsidiaries Steak n Shake Inc. (Steak n Shake) and Western Sizzlin Corporation (Western). Steak n Shake is engaged in the ownership, operation and franchising of Steak n Shake restaurants. Western is engaged primarily in the franchising of restaurants. The Company’s insurance business consists of First Guard Insurance Company and its agency, 1st Guard Corporation. First Guard is a direct underwriter of commercial trucking insurance, selling physical damage and non-trucking liability insurance to truckers. Its media business consists of Maxim. Maxim’s business lies principally in media and licensing.

Papa John’s International Company Profile

Papa John’s International, Inc. (Papa John’s) operates and franchises pizza delivery and carryout restaurants and, in certain international markets, dine-in and delivery restaurants under the trademark Papa John’s. The Company operates through five segments: domestic Company-owned restaurants, North America commissaries, North America franchising, international operations and all other business units. North America is defined as the United States and Canada. Domestic is defined as the contiguous United States. International franchisees are defined as all franchise operations outside of the United States and Canada. As of December 25, 2016, there were 5,097 Papa John’s restaurants in operation, consisting of 744 Company-owned and 4,353 franchised restaurants operating domestically in all 50 states and in 45 countries and territories. It offers pizza along with side items, including breadsticks, cheesesticks, chicken poppers and wings, dessert items and canned or bottled beverages.

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