Luby’s (NYSE: LUB) and Papa John’s International (NASDAQ:PZZA) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.

Risk & Volatility

Luby’s has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Papa John’s International has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500.

Dividends

Papa John’s International pays an annual dividend of $0.90 per share and has a dividend yield of 1.3%. Luby’s does not pay a dividend. Papa John’s International pays out 31.4% of its earnings in the form of a dividend.

Profitability

This table compares Luby’s and Papa John’s International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Luby’s -6.96% -4.97% -3.16%
Papa John’s International 6.13% 919.82% 19.48%

Valuation & Earnings

This table compares Luby’s and Papa John’s International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Luby’s $387.17 million 0.18 $13.97 million ($0.92) -2.64
Papa John’s International $1.75 billion 1.42 $198.59 million $2.87 23.80

Papa John’s International has higher revenue and earnings than Luby’s. Luby’s is trading at a lower price-to-earnings ratio than Papa John’s International, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings for Luby’s and Papa John’s International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Luby’s 0 0 0 0 N/A
Papa John’s International 0 5 4 0 2.44

Papa John’s International has a consensus price target of $82.13, suggesting a potential upside of 20.22%. Given Papa John’s International’s higher possible upside, analysts clearly believe Papa John’s International is more favorable than Luby’s.

Institutional and Insider Ownership

42.9% of Luby’s shares are owned by institutional investors. Comparatively, 84.2% of Papa John’s International shares are owned by institutional investors. 35.2% of Luby’s shares are owned by company insiders. Comparatively, 27.7% of Papa John’s International shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Papa John’s International beats Luby’s on 11 of the 14 factors compared between the two stocks.

Luby’s Company Profile

Luby’s, Inc., is a multi-branded company operating in the restaurant industry and in the contract food services industry. The Company is managed through three segments: Company-owned restaurants, franchise operations, and Culinary Contract Services (CSS). The company-owned restaurants brands are Luby’s Cafeteria, Fuddruckers, and Cheeseburger in Paradise with a couple of non-core restaurant locations under other brand names. As of August 31, 2016, the Company owned and operated 175 restaurants, with 127 in Texas and the remainder in other states. The Company offers franchises for the Fuddruckers brand. As of August 31, 2016, the number of franchised restaurants were 113. Culinary Contract Services consists of contract arrangements to manage food services for clients operating in three lines of business: healthcare, higher education, and corporate dining. As of August 31, 2016, the Company had 24 Culinary Contract Services contracts.

Papa John’s International Company Profile

Papa John’s International, Inc. (Papa John’s) operates and franchises pizza delivery and carryout restaurants and, in certain international markets, dine-in and delivery restaurants under the trademark Papa John’s. The Company operates through five segments: domestic Company-owned restaurants, North America commissaries, North America franchising, international operations and all other business units. North America is defined as the United States and Canada. Domestic is defined as the contiguous United States. International franchisees are defined as all franchise operations outside of the United States and Canada. As of December 25, 2016, there were 5,097 Papa John’s restaurants in operation, consisting of 744 Company-owned and 4,353 franchised restaurants operating domestically in all 50 states and in 45 countries and territories. It offers pizza along with side items, including breadsticks, cheesesticks, chicken poppers and wings, dessert items and canned or bottled beverages.

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