Wendy’s Company (The) (WEN) and Del Taco Restaurants (NASDAQ:TACO) Head-To-Head Comparison
Del Taco Restaurants (NASDAQ: TACO) and Wendy’s Company (The) (NASDAQ:WEN) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitabiliy, dividends, earnings, risk and institutional ownership.
Institutional and Insider Ownership
68.7% of Del Taco Restaurants shares are held by institutional investors. Comparatively, 77.3% of Wendy’s Company (The) shares are held by institutional investors. 14.6% of Del Taco Restaurants shares are held by company insiders. Comparatively, 22.7% of Wendy’s Company (The) 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.
Risk & Volatility
Del Taco Restaurants has a beta of -0.19, indicating that its share price is 119% less volatile than the S&P 500. Comparatively, Wendy’s Company (The) has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.
This is a breakdown of current ratings for Del Taco Restaurants and Wendy’s Company (The), as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Del Taco Restaurants||0||1||5||0||2.83|
|Wendy’s Company (The)||0||9||7||0||2.44|
Del Taco Restaurants presently has a consensus price target of $15.67, indicating a potential upside of 14.77%. Wendy’s Company (The) has a consensus price target of $14.79, indicating a potential downside of 5.22%. Given Del Taco Restaurants’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Del Taco Restaurants is more favorable than Wendy’s Company (The).
This table compares Del Taco Restaurants and Wendy’s Company (The)’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Del Taco Restaurants||4.80%||5.81%||3.02%|
|Wendy’s Company (The)||9.43%||16.31%||2.45%|
Wendy’s Company (The) pays an annual dividend of $0.28 per share and has a dividend yield of 1.8%. Del Taco Restaurants does not pay a dividend. Wendy’s Company (The) pays out 58.3% of its earnings in the form of a dividend.
Earnings & Valuation
This table compares Del Taco Restaurants and Wendy’s Company (The)’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Del Taco Restaurants||$460.03 million||1.14||$66.86 million||$0.56||24.38|
|Wendy’s Company (The)||$1.34 billion||2.86||$371.36 million||$0.48||32.50|
Wendy’s Company (The) has higher revenue and earnings than Del Taco Restaurants. Del Taco Restaurants is trading at a lower price-to-earnings ratio than Wendy’s Company (The), indicating that it is currently the more affordable of the two stocks.
Wendy’s Company (The) beats Del Taco Restaurants on 11 of the 16 factors compared between the two stocks.
About Del Taco Restaurants
Del Taco Restaurants, Inc. is an operator and franchisor of restaurants featuring made-to-order cuisine, including both Mexican inspired and American classic dishes. As of January 3, 2017, the Company operated 551 Del Taco restaurants. The Company’s menu offers a combination of Mexican-inspired food, such as tacos and burritos, and American classics, such as Double Del cheeseburgers, crinkle-cut fries and milkshakes. The Company’s menu features items, such as its Platos plated meals, Epic Burritos, Handcrafted Ensaladas and Fresca Bowls, as well as items on its Buck & Under Menu. As of January 3, 2017, the Company had 310 Company-operated and 241 franchise-operated restaurants. The Platos menu offering consists of individually plated meals complete with an entree, two sides, and chips and salsa. The Company’s menu also includes quesadillas, bowls and handcrafted ensaladas, as well as burgers and fries.
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.
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