Fiesta Restaurant Group (NASDAQ: FRGI) and Papa John’s International (NASDAQ:PZZA) are both restaurants & bars – nec companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, analyst recommendations, risk, valuation, institutional ownership and earnings.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Fiesta Restaurant Group $711.77 million 0.64 $16.71 million ($0.72) -23.40
Papa John’s International $1.71 billion 1.26 $102.82 million $2.91 21.12

Papa John’s International has higher revenue and earnings than Fiesta Restaurant Group. Fiesta Restaurant Group 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.

Volatility & Risk

Fiesta Restaurant Group has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500. Comparatively, Papa John’s International has a beta of 0.48, meaning that its stock price is 52% 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 1.5%. Fiesta Restaurant Group does not pay a dividend. Papa John’s International pays out 30.9% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent recommendations for Fiesta Restaurant Group and Papa John’s International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fiesta Restaurant Group 1 5 1 0 2.00
Papa John’s International 0 6 3 0 2.33

Fiesta Restaurant Group currently has a consensus price target of $23.40, suggesting a potential upside of 38.87%. Papa John’s International has a consensus price target of $79.25, suggesting a potential upside of 28.92%. Given Fiesta Restaurant Group’s higher possible upside, equities research analysts clearly believe Fiesta Restaurant Group is more favorable than Papa John’s International.

Institutional & Insider Ownership

93.9% of Fiesta Restaurant Group shares are held by institutional investors. Comparatively, 84.2% of Papa John’s International shares are held by institutional investors. 2.2% of Fiesta Restaurant Group shares are held by company insiders. Comparatively, 27.7% of Papa John’s International shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Fiesta Restaurant Group -2.75% 11.77% 6.95%
Papa John’s International 6.12% 4,321.08% 19.07%

Summary

Papa John’s International beats Fiesta Restaurant Group on 12 of the 16 factors compared between the two stocks.

Fiesta Restaurant Group Company Profile

Fiesta Restaurant Group, Inc. owns, operates and franchises two fast-casual restaurant brands, Pollo Tropical and Taco Cabana through its subsidiaries Pollo Operations, Inc., and its subsidiaries, and Pollo Franchise, Inc., (collectively Pollo Tropical) and Taco Cabana, Inc. and its subsidiaries (collectively Taco Cabana). The Company operates through the Pollo Tropical and Taco Cabana segments. The Company’s Pollo Tropical restaurants offer Caribbean menu items, featuring its bone-in chicken marinated in blend of tropical fruit juices and grilled over an open flame. The Company also offers catering for parties and corporate events. The Company’s Taco Cabana restaurants serves Mexican food, including flame-grilled steak and chicken fajitas served on sizzling iron skillets, quesadillas, hand-rolled flautas, enchiladas, burritos, tacos, fresh-made flour tortillas, customizable salads served in its Cabana Bowl, and its breakfast tacos.

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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