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

Analyst Recommendations

This is a breakdown of recent ratings for Yum China Holdings and Papa Murphy’s Holdings, 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
Papa Murphy’s Holdings 0 4 0 0 2.00

Yum China Holdings currently has a consensus target price of $43.21, indicating a potential upside of 2.32%. Papa Murphy’s Holdings has a consensus target price of $4.75, indicating a potential downside of 13.64%. Given Yum China Holdings’ stronger consensus rating and higher probable upside, analysts plainly believe Yum China Holdings is more favorable than Papa Murphy’s Holdings.

Valuation and Earnings

This table compares Yum China Holdings and Papa Murphy’s Holdings’ gross 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 2.40 $1.06 billion N/A N/A
Papa Murphy’s Holdings $125.10 million 0.75 $16.53 million ($0.63) -8.73

Yum China Holdings has higher revenue and earnings than Papa Murphy’s Holdings.

Institutional and Insider Ownership

36.5% of Papa Murphy’s Holdings shares are owned by institutional investors. 3.1% of Papa Murphy’s Holdings shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Yum China Holdings and Papa Murphy’s Holdings’ 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%
Papa Murphy’s Holdings -8.43% 3.16% 1.15%

Summary

Yum China Holdings beats Papa Murphy’s Holdings on 9 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.

Papa Murphy’s Holdings Company Profile

Papa Murphy’s Holdings, Inc. is a holding company. The Company, together with its subsidiaries, is a franchisor and operator of the Take ‘N’ Bake pizza chain in the United States. The Company franchises the right to operate Take ‘N’ Bake pizza franchises and operates Take ‘N’ Bake pizza stores owned by the Company. The Company operates through three segments: Domestic Company Stores, Domestic Franchise and International. Its Domestic Franchise segment consists of its domestic franchised stores, which represent its system-wide stores and derives its revenues from franchise and development fees and the collection of franchise royalties. The Domestic Company Stores segment consists of its Company-owned stores in the United States and derives its revenues from retail sales of pizza and side items to the general public. Its International segment consists of its stores outside of the United States, all of which are franchised and derives its revenues from franchise and development fees.

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