Head-To-Head Review: Diversified Restaurant Holdings (NASDAQ:SAUC) & Restaurant Brands International (QSR)
Restaurant Brands International (NYSE: QSR) and Diversified Restaurant Holdings (NASDAQ:SAUC) are both retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, valuation, dividends, profitabiliy, analyst recommendations, institutional ownership and risk.
This table compares Restaurant Brands International and Diversified Restaurant Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Restaurant Brands International||12.97%||21.88%||3.95%|
|Diversified Restaurant Holdings||-3.14%||-9.99%||-0.41%|
Valuation & Earnings
This table compares Restaurant Brands International and Diversified Restaurant Holdings’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Restaurant Brands International||$4.23 billion||3.43||$1.86 billion||$1.45||42.44|
|Diversified Restaurant Holdings||$167.72 million||0.41||$21.44 million||($0.21)||-12.19|
Restaurant Brands International has higher revenue and earnings than Diversified Restaurant Holdings. Diversified Restaurant Holdings is trading at a lower price-to-earnings ratio than Restaurant Brands International, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
76.0% of Restaurant Brands International shares are held by institutional investors. Comparatively, 11.5% of Diversified Restaurant Holdings shares are held by institutional investors. 4.2% of Restaurant Brands International shares are held by insiders. Comparatively, 48.2% of Diversified Restaurant Holdings shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This is a summary of current ratings and price targets for Restaurant Brands International and Diversified Restaurant Holdings, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Restaurant Brands International||0||5||11||0||2.69|
|Diversified Restaurant Holdings||0||0||1||0||3.00|
Restaurant Brands International currently has a consensus target price of $60.73, suggesting a potential downside of 1.31%. Diversified Restaurant Holdings has a consensus target price of $3.50, suggesting a potential upside of 36.72%. Given Diversified Restaurant Holdings’ stronger consensus rating and higher possible upside, analysts plainly believe Diversified Restaurant Holdings is more favorable than Restaurant Brands International.
Risk and Volatility
Restaurant Brands International has a beta of 1.81, meaning that its stock price is 81% more volatile than the S&P 500. Comparatively, Diversified Restaurant Holdings has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500.
Restaurant Brands International pays an annual dividend of $0.76 per share and has a dividend yield of 1.2%. Diversified Restaurant Holdings does not pay a dividend. Restaurant Brands International pays out 52.4% of its earnings in the form of a dividend.
Restaurant Brands International beats Diversified Restaurant Holdings on 11 of the 15 factors compared between the two stocks.
Restaurant Brands International Company Profile
Restaurant Brands International Inc. is a quick service restaurant (QSR) company. The Company had over 20,000 restaurants in more than 100 countries and the United States territories, as of December 31, 2016. It operates through two segments: Tim Hortons (TH) and Burger King (BK). Tim Hortons restaurants are quick service restaurants with a menu that includes blend coffee, tea, espresso-based hot and cold specialty drinks, baked goods, including donuts, Timbits, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps and soups, among others. Burger King restaurants are quick service restaurants that feature flame-grilled hamburgers, chicken and other specialty sandwiches, French fries, soft drinks and other food items. The Company operates coffee roasting facilities in Hamilton, Ontario and Rochester, New York. The Company sells its raw materials and supplies, including coffee, sugar, paper goods and other restaurant supplies to Tim Hortons restaurants.
Diversified Restaurant Holdings Company Profile
Diversified Restaurant Holdings, Inc. (DRH) is a restaurant company. The Company is a franchisee of Buffalo Wild Wings (BWW).As of September 25, 2016, the Company operated 64 BWW restaurants, which are located in Michigan, Florida, Missouri, Illinois and Indiana. The BWW restaurants feature a range of menu items with a multimedia social environment, a bar and an open layout designed to create a dining experience for sports fans and families. Its guests have the option of watching various sporting events on projection screens or televisions. As of September 25, 2016, the BWW menu specialized in 21 sauces and seasonings with flavors ranging from Sweet BBQ to Blazin’. As of September 25, 2016, the restaurants offered 12 to 30 domestic and imported beers on tap, including several local or regional microbrews and a selection of bottled beer, wine and liquor.
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