Critical Analysis: Carrols Restaurant Group (TAST) & Yum! Brands (YUM)
Carrols Restaurant Group (NASDAQ: TAST) and Yum! Brands (NYSE:YUM) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.
This is a breakdown of current ratings and recommmendations for Carrols Restaurant Group and Yum! Brands, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Carrols Restaurant Group||0||0||1||1||3.50|
Carrols Restaurant Group presently has a consensus target price of $16.50, suggesting a potential upside of 50.00%. Yum! Brands has a consensus target price of $77.76, suggesting a potential upside of 2.20%. Given Carrols Restaurant Group’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Carrols Restaurant Group is more favorable than Yum! Brands.
Insider & Institutional Ownership
86.8% of Carrols Restaurant Group shares are owned by institutional investors. Comparatively, 72.1% of Yum! Brands shares are owned by institutional investors. 5.3% of Carrols Restaurant Group shares are owned by company insiders. Comparatively, 0.7% of Yum! Brands shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Risk & Volatility
Carrols Restaurant Group has a beta of 0.02, meaning that its share price is 98% less volatile than the S&P 500. Comparatively, Yum! Brands has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.
This table compares Carrols Restaurant Group and Yum! Brands’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Carrols Restaurant Group||3.44%||6.33%||1.86%|
Yum! Brands pays an annual dividend of $1.20 per share and has a dividend yield of 1.6%. Carrols Restaurant Group does not pay a dividend. Yum! Brands pays out 33.1% of its earnings in the form of a dividend. Yum! Brands has raised its dividend for 8 consecutive years.
Valuation and Earnings
This table compares Carrols Restaurant Group and Yum! Brands’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Carrols Restaurant Group||$999.03 million||0.39||$80.24 million||$0.72||15.28|
|Yum! Brands||$6.28 billion||4.18||$2.04 billion||$3.62||21.02|
Yum! Brands has higher revenue and earnings than Carrols Restaurant Group. Carrols Restaurant Group is trading at a lower price-to-earnings ratio than Yum! Brands, indicating that it is currently the more affordable of the two stocks.
Yum! Brands beats Carrols Restaurant Group on 10 of the 18 factors compared between the two stocks.
Carrols Restaurant Group Company Profile
Carrols Restaurant Group, Inc. is a holding company and conducts all of its operations through its subsidiary, Carrols Corporation (Carrols) and Carrols’ subsidiary, Carrols LLC. The Company is a restaurant company and Burger King franchisee in the United States. As of January 1, 2017, the Company had owned and operated 753 Burger King restaurants under the name Burger King in 16 Northeastern, Midwestern and Southeastern states. Burger King restaurants feature the flame-broiled Whopper sandwich, as well as a range of hamburgers, chicken and other specialty sandwiches, French fries, salads, breakfast items, hot dogs, snacks, smoothies, frappes and other offerings. The Company’s Burger King restaurants are located in various states, such as Illinois, Indiana, Kentucky, Maine, Massachusetts, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Vermont, Virginia and West Virginia.
Yum! Brands Company Profile
YUM! Brands, Inc. is engaged in restaurant business. As of December 31, 2016, the Company operated or franchised over 43,500 restaurants in more than 135 countries and territories operating under the KFC, Pizza Hut or Taco Bell (collectively the Concepts) brands. The Company operates through three segments: The KFC Division, which includes the operations of the KFC concept around the world; The Pizza Hut Division, which includes the operations of the Pizza Hut concept around the world, and The Taco Bell Division, which includes the operations of the Taco Bell concept around the world. KFC restaurants across the world offer fried and non-fried chicken products, such as sandwiches, chicken strips, chicken-on-the-bone and other chicken products. Pizza Hut is a restaurant chain specialized in the sale of ready-to-eat pizza products. Taco Bell specializes in Mexican-style food products, including various types of tacos, burritos, quesadillas, salads, nachos and other related items.
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