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

Institutional and Insider Ownership

65.7% of Noodles & shares are owned by institutional investors. 52.7% of Noodles & shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings for Yum China Holdings and Noodles &, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yum China Holdings 1 4 8 0 2.54
Noodles & 1 6 0 0 1.86

Yum China Holdings currently has a consensus price target of $43.21, indicating a potential upside of 0.62%. Noodles & has a consensus price target of $4.79, indicating a potential upside of 11.30%. Given Noodles &’s higher possible upside, analysts clearly believe Noodles & is more favorable than Yum China Holdings.

Valuation & Earnings

This table compares Yum China Holdings and Noodles &’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 2.44 $1.06 billion N/A N/A
Noodles & $481.59 million 0.37 $12.41 million ($3.19) -1.35

Yum China Holdings has higher revenue and earnings than Noodles &.

Profitability

This table compares Yum China Holdings and Noodles &’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%
Noodles & -17.42% -10.25% -2.10%

Summary

Yum China Holdings beats Noodles & on 8 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.

Noodles & Company Profile

Noodles & Company develops and operates fast casual restaurants. The Company’s menu includes a range of cooked-to-order dishes, including noodles and pasta, soups, salads, sandwiches and appetizers. The Company has approximately 490 restaurants, including 420 Company-owned and 70 franchised locations, across 40 states, the District of Columbia and one Canadian province. The Company offers over 30 globally inspired Asian, Mediterranean and American dishes together on a single menu. The Company offers approximately 10 fresh vegetables and six proteins, including marinated steak, naturally raised pork, chicken, meatballs, shrimp and organic tofu. The Company offers Kids Meals, which includes sides, such as broccoli, carrots, fruit, applesauce and a portion of its housemade rice crispy treat. The Company’s restaurants’ locations include Arizona, California, Colorado, Delaware, New York, North Dakota, Ohio, Texas, Utah, Virginia, Washington and Wisconsin.

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