Yum China Holdings (NASDAQ: YUMC) and Wingstop (NASDAQ:WING) are both cyclical consumer goods & services companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Valuation and Earnings

This table compares Yum China Holdings and Wingstop’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Yum China Holdings $6.75 billion 2.10 $1.06 billion N/A N/A
Wingstop $97.80 million 10.33 $35.13 million $0.64 54.31

Yum China Holdings has higher revenue and earnings than Wingstop.

Analyst Ratings

This is a summary of current recommendations for Yum China Holdings and Wingstop, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yum China Holdings 1 5 4 0 2.30
Wingstop 0 2 6 1 2.89

Yum China Holdings currently has a consensus target price of $37.35, suggesting a potential upside of 0.80%. Wingstop has a consensus target price of $34.56, suggesting a potential downside of 0.59%. Given Yum China Holdings’ higher possible upside, equities analysts plainly believe Yum China Holdings is more favorable than Wingstop.

Profitability

This table compares Yum China Holdings and Wingstop’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Yum China Holdings 7.09% 16.35% 11.33%
Wingstop 19.28% -28.04% 17.56%

Summary

Wingstop beats Yum China Holdings on 7 of the 11 factors compared between the two stocks.

Yum China Holdings Company Profile

Yum China Holdings, Inc. is a restaurant company. The Company’s segments include KFC, Pizza Hut Casual Dining, and All Other Segments, including Pizza Hut Home Service, East Dawning, Little Sheep and Taco Bell. As of December 31, 2016, the Company had over 7,500 restaurants in China. Its restaurant base consists of various restaurant concepts. The Company’s restaurants in each of its concept offer consumers the ability to dine in and/or carry out food. In addition, KFC, Pizza Hut Casual Dining, Pizza Hut Home Service and East Dawning offer delivery service. KFC is the quick-service restaurant (QSR) brand. Pizza Hut Casual Dining is the casual dining restaurant (CDR) brand. As of December 31, 2016, the Company had over 360 Pizza Hut Home Service units in over 50 cities in China. The Little Sheep concept specializes in Hot Pot cooking. East Dawning is a Chinese food QSR brand. Taco Bell is a QSR brand specializing in Mexican-style food.

Wingstop Company Profile

Wingstop Inc. is franchisor and operator of restaurants that specializes in cooked-to-order, hand-sauced and tossed chicken wings. The Company operates through two segments: Franchise and Company. As of December 31, 2016, the Company offers its guests 11 flavors on bone-in and boneless chicken wings paired with hand-cut, seasoned fries and sides. It is a casual chicken wings-focused restaurant chain with various concepts, which include wings as add-on menu items or focus on wings in a bar or sports-centric setting. The flavors include Atomic, Mango Habanero, Cajun, Original Hot, Louisiana Rub, Mild, Hickory Smoked BBQ, Lemon Pepper, Garlic Parmesan, Hawaiian and Teriyaki. It offers various order options, including eat-in, to go, individual, combo meals and family packs. The Company maintains Website hosting, and manages the development and maintenance of the mobile Wingstop application. It markets Wingstop products, services and restaurants through the Website, www.wingstop.com.

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