Head-To-Head Analysis: Popeyes Louisiana Kitchen (NASDAQ:PLKI) vs. Domino’s Pizza (DPZ)

Popeyes Louisiana Kitchen (NASDAQ: PLKI) and Domino’s Pizza (NYSE:DPZ) 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 analyst recommendations, institutional ownership, dividends, risk, valuation, profitability and earnings.

Dividends

Domino’s Pizza pays an annual dividend of $1.84 per share and has a dividend yield of 1.0%. Popeyes Louisiana Kitchen does not pay a dividend. Domino’s Pizza pays out 35.1% of its earnings in the form of a dividend. Domino’s Pizza has raised its dividend for 3 consecutive years.

Risk and Volatility

Popeyes Louisiana Kitchen has a beta of -0.11, suggesting that its share price is 111% less volatile than the S&P 500. Comparatively, Domino’s Pizza has a beta of 0.36, suggesting that its share price is 64% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Popeyes Louisiana Kitchen and Domino’s Pizza, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Popeyes Louisiana Kitchen 1 4 1 0 2.00
Domino’s Pizza 0 9 8 0 2.47

Popeyes Louisiana Kitchen presently has a consensus price target of $69.75, suggesting a potential downside of 11.68%. Domino’s Pizza has a consensus price target of $207.52, suggesting a potential upside of 11.76%. Given Domino’s Pizza’s stronger consensus rating and higher possible upside, analysts plainly believe Domino’s Pizza is more favorable than Popeyes Louisiana Kitchen.

Earnings & Valuation

This table compares Popeyes Louisiana Kitchen and Domino’s Pizza’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Popeyes Louisiana Kitchen N/A N/A N/A $1.96 40.29
Domino’s Pizza $2.72 billion 2.99 $528.63 million $5.24 35.44

Domino’s Pizza has higher revenue and earnings than Popeyes Louisiana Kitchen. Domino’s Pizza 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.

Profitability

This table compares Popeyes Louisiana Kitchen and Domino’s Pizza’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Popeyes Louisiana Kitchen 15.08% 490.51% 15.48%
Domino’s Pizza 9.47% -12.59% 34.19%

Insider & Institutional Ownership

97.6% of Popeyes Louisiana Kitchen shares are owned by institutional investors. Comparatively, 94.2% of Domino’s Pizza shares are owned by institutional investors. 2.2% of Popeyes Louisiana Kitchen shares are owned by company insiders. Comparatively, 3.6% of Domino’s Pizza shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Domino’s Pizza beats Popeyes Louisiana Kitchen on 10 of the 14 factors compared between the two stocks.

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.

About Domino’s Pizza

Domino’s Pizza, Inc. is a pizza restaurant chain company. As of January 1, 2017, the Company operated in over 13,800 locations in over 85 markets around the world. The Company operates through three segments: domestic stores, international franchise and supply chain. Its basic menu features pizza products in various sizes and crust types. As of January 1, 2017, its Domestic Stores segment consisted primarily of its franchise operations, which consisted of 4,979 franchised stores located in the contiguous United States. As of January 1, 2017, its International Franchise segment consisted of a network of franchised stores in over 85 international markets. As of January 1, 2017, its supply chain segment operated 18 regional dough manufacturing and food supply chain centers in the United States, one thin crust manufacturing center, one vegetable processing center and one center providing equipment and supplies to certain of its domestic and international stores.

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