Papa Murphy’s Holdings (NASDAQ: FRSH) and Chipotle Mexican Grill (NYSE:CMG) are both quick service restaurants companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitability, analyst recommendations and dividends.

Risk and Volatility

Papa Murphy’s Holdings has a beta of 0.03, meaning that its share price is 97% less volatile than the S&P 500. Comparatively, Chipotle Mexican Grill has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500.

Earnings & Valuation

This table compares Papa Murphy’s Holdings and Chipotle Mexican Grill’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Papa Murphy’s Holdings $126.88 million 0.76 $2.64 million ($0.63) -8.98
Chipotle Mexican Grill $3.90 billion 1.98 $22.93 million $5.16 53.01

Chipotle Mexican Grill has higher revenue and earnings than Papa Murphy’s Holdings. Papa Murphy’s Holdings is trading at a lower price-to-earnings ratio than Chipotle Mexican Grill, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Papa Murphy’s Holdings and Chipotle Mexican Grill’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Papa Murphy’s Holdings -8.43% 3.16% 1.15%
Chipotle Mexican Grill 3.37% 11.80% 8.11%

Institutional & Insider Ownership

36.0% of Papa Murphy’s Holdings shares are held by institutional investors. Comparatively, 89.5% of Chipotle Mexican Grill shares are held by institutional investors. 3.1% of Papa Murphy’s Holdings shares are held by company insiders. Comparatively, 2.0% of Chipotle Mexican Grill shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Papa Murphy’s Holdings and Chipotle Mexican Grill, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Papa Murphy’s Holdings 0 4 0 0 2.00
Chipotle Mexican Grill 5 21 9 0 2.11

Papa Murphy’s Holdings presently has a consensus price target of $4.75, indicating a potential downside of 16.08%. Chipotle Mexican Grill has a consensus price target of $350.80, indicating a potential upside of 28.25%. Given Chipotle Mexican Grill’s stronger consensus rating and higher possible upside, analysts plainly believe Chipotle Mexican Grill is more favorable than Papa Murphy’s Holdings.

Summary

Chipotle Mexican Grill beats Papa Murphy’s Holdings on 13 of the 14 factors compared between the two stocks.

About Papa Murphy’s Holdings

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.

About Chipotle Mexican Grill

Chipotle Mexican Grill, Inc. (Chipotle), together with its subsidiaries, operates Chipotle Mexican Grill restaurants. The Company’s Chipotle Mexican Grill restaurants serve a menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. As of December 31, 2016, the Company managed its operations and restaurants based on 11 regions. As of December 31, 2016, the Company operated 2,198 Chipotle restaurants throughout the United States, as well as 29 international Chipotle restaurants, and it also had 23 restaurants in operation in other non-Chipotle concepts. As of December 31, 2016, 29 of its restaurants were located outside of the United States, with 17 in Canada, six in the United Kingdom, five in France and one in Frankfurt, Germany. The Company sells gift cards, which do not have an expiration date. The Company categorizes its restaurants as end-caps (at the end of a line of retail outlets), in-lines (in a line of retail outlets), free-standing or other.

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