Critical Survey: Bojangles’ (NASDAQ:BOJA) & Papa John’s International (PZZA)

Papa John’s International (NASDAQ: PZZA) and Bojangles’ (NASDAQ:BOJA) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.

Valuation & Earnings

This table compares Papa John’s International and Bojangles”s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Papa John’s International $1.75 billion 1.42 $198.59 million $2.87 23.80
Bojangles’ $538.50 million 0.83 $79.81 million $0.95 12.79

Papa John’s International has higher revenue and earnings than Bojangles’. Bojangles’ 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.

Volatility and Risk

Papa John’s International has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, Bojangles’ has a beta of 1.97, indicating that its stock price is 97% more volatile than the S&P 500.

Dividends

Papa John’s International pays an annual dividend of $0.90 per share and has a dividend yield of 1.3%. Bojangles’ does not pay a dividend. Papa John’s International pays out 31.4% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Papa John’s International 6.13% 919.82% 19.48%
Bojangles’ 6.70% 17.05% 6.47%

Analyst Recommendations

This is a breakdown of current ratings for Papa John’s International and Bojangles’, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Papa John’s International 0 5 4 0 2.44
Bojangles’ 0 8 2 0 2.20

Papa John’s International presently has a consensus target price of $82.13, indicating a potential upside of 20.22%. Bojangles’ has a consensus target price of $18.13, indicating a potential upside of 49.18%. Given Bojangles”s higher probable upside, analysts plainly believe Bojangles’ is more favorable than Papa John’s International.

Insider & Institutional Ownership

84.2% of Papa John’s International shares are held by institutional investors. Comparatively, 91.3% of Bojangles’ shares are held by institutional investors. 27.7% of Papa John’s International shares are held by company insiders. Comparatively, 55.3% of Bojangles’ shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Papa John’s International beats Bojangles’ on 10 of the 16 factors compared between the two stocks.

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.

Bojangles’ Company Profile

Bojangles’, Inc. is a restaurant operator and franchisor. The Company offers food made from its Southern recipes. The Company’s menu includes its made-from-scratch, buttermilk biscuits baked fresh every 20 minutes; its fresh, never-frozen bone-in fried chicken; its fixin’s; its Bo-Smart menu featuring items, such as salads, grilled chicken sandwiches, roasted chicken bites and fat-free green beans; its freshly baked and delicious sweets menu, and its Legendary Iced Tea. The Company’s food is offered a la carte and in combos. The Company’s chicken, fixin’s, biscuits and Legendary Iced Tea may also be ordered in boxes or family meals, and larger combinations may be offered as tailgate specials or may be packaged in its Big Bo Box. The Company offers Southern style mac ‘n cheese made from two cheeses; fat-free green beans; cole slaw, and mashed potatoes with gravy. Its menu also features salads, sandwiches and its whole meat Roasted Chicken Bites.

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