Wendy’s Company (The) (NASDAQ: WEN) is one of 22 publicly-traded companies in the “Quick Service Restaurants” industry, but how does it contrast to its peers? We will compare Wendy’s Company (The) to related businesses based on the strength of its profitability, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.

Volatility & Risk

Wendy’s Company (The) has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, Wendy’s Company (The)’s peers have a beta of 0.53, meaning that their average stock price is 47% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Wendy’s Company (The) and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wendy’s Company (The) 0 9 7 0 2.44
Wendy’s Company (The) Competitors 326 1455 1655 85 2.43

Wendy’s Company (The) currently has a consensus target price of $15.57, suggesting a potential upside of 2.51%. As a group, “Quick Service Restaurants” companies have a potential upside of 14.81%. Given Wendy’s Company (The)’s peers higher probable upside, analysts plainly believe Wendy’s Company (The) has less favorable growth aspects than its peers.

Earnings and Valuation

This table compares Wendy’s Company (The) and its peers revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Wendy’s Company (The) $1.28 billion $385.41 million 41.05
Wendy’s Company (The) Competitors $3.06 billion $846.52 million 28.98

Wendy’s Company (The)’s peers have higher revenue and earnings than Wendy’s Company (The). Wendy’s Company (The) is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Dividends

Wendy’s Company (The) pays an annual dividend of $0.28 per share and has a dividend yield of 1.8%. Wendy’s Company (The) pays out 75.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Quick Service Restaurants” companies pay a dividend yield of 1.6% and pay out 43.1% of their earnings in the form of a dividend.

Institutional & Insider Ownership

76.5% of Wendy’s Company (The) shares are owned by institutional investors. Comparatively, 80.0% of shares of all “Quick Service Restaurants” companies are owned by institutional investors. 26.5% of Wendy’s Company (The) shares are owned by company insiders. Comparatively, 16.8% of shares of all “Quick Service Restaurants” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Wendy’s Company (The) and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wendy’s Company (The) 7.68% 19.67% 2.71%
Wendy’s Company (The) Competitors 6.90% 12.59% 9.54%

Summary

Wendy’s Company (The) peers beat Wendy’s Company (The) on 8 of the 15 factors compared.

Wendy’s Company (The) Company Profile

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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