Domino’s Pizza (NYSE: DPZ) and Red Robin Gourmet Burgers (NASDAQ:RRGB) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Institutional and Insider Ownership

94.2% of Domino’s Pizza shares are held by institutional investors. 3.6% of Domino’s Pizza shares are held by company insiders. Comparatively, 2.7% of Red Robin Gourmet Burgers shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Domino’s Pizza has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500. Comparatively, Red Robin Gourmet Burgers has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500.

Earnings and Valuation

This table compares Domino’s Pizza and Red Robin Gourmet Burgers’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Domino’s Pizza $2.47 billion 3.29 $214.67 million $5.24 35.53
Red Robin Gourmet Burgers $1.30 billion 0.52 $11.72 million $0.95 55.16

Domino’s Pizza has higher revenue and earnings than Red Robin Gourmet Burgers. Domino’s Pizza is trading at a lower price-to-earnings ratio than Red Robin Gourmet Burgers, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for Domino’s Pizza and Red Robin Gourmet Burgers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Domino’s Pizza 0 9 10 0 2.53
Red Robin Gourmet Burgers 0 6 5 0 2.45

Domino’s Pizza presently has a consensus price target of $206.90, indicating a potential upside of 11.14%. Red Robin Gourmet Burgers has a consensus price target of $68.60, indicating a potential upside of 30.92%. Given Red Robin Gourmet Burgers’ higher probable upside, analysts plainly believe Red Robin Gourmet Burgers is more favorable than Domino’s Pizza.

Profitability

This table compares Domino’s Pizza and Red Robin Gourmet Burgers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Domino’s Pizza 9.47% -12.59% 34.19%
Red Robin Gourmet Burgers 0.94% 7.32% 2.94%

Dividends

Domino’s Pizza pays an annual dividend of $1.84 per share and has a dividend yield of 1.0%. Red Robin Gourmet Burgers does not pay a dividend. Domino’s Pizza pays out 35.1% of its earnings in the form of a dividend. Red Robin Gourmet Burgers has raised its dividend for 3 consecutive years.

Summary

Domino’s Pizza beats Red Robin Gourmet Burgers on 12 of the 17 factors compared between the two stocks.

About Domino’s Pizza

Domino’s Pizza, Inc. is a pizza restaurant chain company. As of January 1, 2017, the Company operated in over 13,800 locations in over 85 markets around the world. The Company operates through three segments: domestic stores, international franchise and supply chain. Its basic menu features pizza products in various sizes and crust types. As of January 1, 2017, its Domestic Stores segment consisted primarily of its franchise operations, which consisted of 4,979 franchised stores located in the contiguous United States. As of January 1, 2017, its International Franchise segment consisted of a network of franchised stores in over 85 international markets. As of January 1, 2017, its supply chain segment operated 18 regional dough manufacturing and food supply chain centers in the United States, one thin crust manufacturing center, one vegetable processing center and one center providing equipment and supplies to certain of its domestic and international stores.

About Red Robin Gourmet Burgers

Red Robin Gourmet Burgers, Inc., together with its subsidiaries, primarily develops, operates, and franchises full-service restaurants in North America and focuses on serving selection of gourmet burgers. The Company’s menu features a line of gourmet burgers, which it makes from ground beef, as well as its line of Red’s Tavern Double Burgers and its Red Robin’s line of half-pound Angus beef burgers with various toppings. The Company also offers burgers made from chicken breasts, fish fillets, turkey patties, as well as vegetarian and vegan options. The Company offered a selection of buns, including ciabatta, gluten free, sesame, onion, whole grain, jalapeno and lettuce wraps a range of toppings, including fresh guacamole, house made barbeque sauces, aiolis, grilled pineapple, crispy onion straws, sauteed mushrooms, fried jalapenos, bruschetta salsa, coleslaw, eight different cheese choices and a fried egg, as of December 25, 2016.

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