Popeyes Louisiana Kitchen (PLKI) and Chipotle Mexican Grill (CMG) Financial Review
Chipotle Mexican Grill (NYSE: CMG) and Popeyes Louisiana Kitchen (NASDAQ:PLKI) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, profitabiliy, analyst recommendations, institutional ownership and dividends.
This table compares Chipotle Mexican Grill and Popeyes Louisiana Kitchen’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Chipotle Mexican Grill||2.31%||7.72%||5.36%|
|Popeyes Louisiana Kitchen||15.08%||490.51%||15.48%|
This is a breakdown of current ratings and target prices for Chipotle Mexican Grill and Popeyes Louisiana Kitchen, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Chipotle Mexican Grill||7||15||12||0||2.15|
|Popeyes Louisiana Kitchen||1||5||1||0||2.00|
Chipotle Mexican Grill presently has a consensus target price of $450.90, suggesting a potential upside of 13.84%. Popeyes Louisiana Kitchen has a consensus target price of $67.00, suggesting a potential downside of 15.16%. Given Chipotle Mexican Grill’s stronger consensus rating and higher possible upside, research analysts plainly believe Chipotle Mexican Grill is more favorable than Popeyes Louisiana Kitchen.
Earnings and Valuation
This table compares Chipotle Mexican Grill and Popeyes Louisiana Kitchen’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Chipotle Mexican Grill||$4.14 billion||2.74||$330.51 million||$3.29||120.39|
|Popeyes Louisiana Kitchen||N/A||N/A||N/A||$1.96||40.29|
Chipotle Mexican Grill has higher revenue and earnings than Popeyes Louisiana Kitchen. Popeyes Louisiana Kitchen is trading at a lower price-to-earnings ratio than Chipotle Mexican Grill, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
95.6% of Chipotle Mexican Grill shares are owned by institutional investors. Comparatively, 97.6% of Popeyes Louisiana Kitchen shares are owned by institutional investors. 2.0% of Chipotle Mexican Grill shares are owned by company insiders. Comparatively, 2.2% of Popeyes Louisiana Kitchen shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Volatility and Risk
Chipotle Mexican Grill has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, Popeyes Louisiana Kitchen has a beta of -0.11, suggesting that its stock price is 111% less volatile than the S&P 500.
Chipotle Mexican Grill beats Popeyes Louisiana Kitchen on 6 of the 11 factors compared between the two stocks.
About Chipotle Mexican Grill
Chipotle Mexican Grill, Inc. (Chipotle), together with its subsidiaries, operates Chipotle Mexican Grill restaurants. The Company’s Chipotle Mexican Grill restaurants serve a menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. As of December 31, 2016, the Company managed its operations and restaurants based on 11 regions. As of December 31, 2016, the Company operated 2,198 Chipotle restaurants throughout the United States, as well as 29 international Chipotle restaurants, and it also had 23 restaurants in operation in other non-Chipotle concepts. As of December 31, 2016, 29 of its restaurants were located outside of the United States, with 17 in Canada, six in the United Kingdom, five in France and one in Frankfurt, Germany. The Company sells gift cards, which do not have an expiration date. The Company categorizes its restaurants as end-caps (at the end of a line of retail outlets), in-lines (in a line of retail outlets), free-standing or other.
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.
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