Wendy’s Company (The) (WEN) vs. Noodles & (NDLS) Critical Review
Wendy’s Company (The) (NASDAQ: WEN) and Noodles & (NASDAQ:NDLS) are both retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.
This is a summary of current ratings and price targets for Wendy’s Company (The) and Noodles &, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Wendy’s Company (The)||0||9||7||0||2.44|
Wendy’s Company (The) currently has a consensus target price of $15.57, suggesting a potential upside of 4.30%. Noodles & has a consensus target price of $4.93, suggesting a potential upside of 4.86%. Given Noodles &’s higher possible upside, analysts clearly believe Noodles & is more favorable than Wendy’s Company (The).
Volatility & Risk
Wendy’s Company (The) has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, Noodles & has a beta of -0.57, meaning that its share price is 157% less volatile than the S&P 500.
Earnings and Valuation
This table compares Wendy’s Company (The) and Noodles &’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Wendy’s Company (The)||$1.28 billion||2.84||$385.41 million||$0.37||40.35|
|Noodles &||$481.59 million||0.39||$12.41 million||($3.19)||-1.47|
Wendy’s Company (The) has higher revenue and earnings than Noodles &. Noodles & is trading at a lower price-to-earnings ratio than Wendy’s Company (The), indicating that it is currently the more affordable of the two stocks.
This table compares Wendy’s Company (The) and Noodles &’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Wendy’s Company (The)||7.68%||19.67%||2.71%|
Insider and Institutional Ownership
76.5% of Wendy’s Company (The) shares are held by institutional investors. Comparatively, 67.7% of Noodles & shares are held by institutional investors. 26.5% of Wendy’s Company (The) shares are held by insiders. Comparatively, 52.7% of Noodles & shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Wendy’s Company (The) pays an annual dividend of $0.28 per share and has a dividend yield of 1.9%. Noodles & does not pay a dividend. Wendy’s Company (The) pays out 75.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Wendy’s Company (The) beats Noodles & on 12 of the 15 factors compared between the two stocks.
About Wendy’s Company (The)
The Wendy’s Company is the parent company of subsidiary holding company Wendy’s Restaurants, LLC (Wendy’s Restaurants). Wendy’s Restaurants is the parent company of Wendy’s International, LLC (Wendy’s), which is the owner and franchisor of the Wendy’s restaurant system in the United States. Wendy’s is a restaurant company specializing in the hamburger sandwich segment. Wendy’s is engaged in the business of operating, developing and franchising a system of restaurants serving food. The Company operated approximately 6,080 Wendy’s restaurants in operation in North America, as of January 1, 2017. Of these restaurants, 330 were operated by the Company and 5,768 by a total of 376 franchisees, as of January 1, 2017. In addition, as of January 1, 2017, there were 439 franchised Wendy’s restaurants in operation in 29 countries and territories other than North America. Wendy’s is also a partner in a restaurant real estate joint venture with a subsidiary of Restaurant Brands International Inc.
About Noodles &
Noodles & Company develops and operates fast casual restaurants. The Company’s menu includes a range of cooked-to-order dishes, including noodles and pasta, soups, salads, sandwiches and appetizers. The Company has approximately 490 restaurants, including 420 Company-owned and 70 franchised locations, across 40 states, the District of Columbia and one Canadian province. The Company offers over 30 globally inspired Asian, Mediterranean and American dishes together on a single menu. The Company offers approximately 10 fresh vegetables and six proteins, including marinated steak, naturally raised pork, chicken, meatballs, shrimp and organic tofu. The Company offers Kids Meals, which includes sides, such as broccoli, carrots, fruit, applesauce and a portion of its housemade rice crispy treat. The Company’s restaurants’ locations include Arizona, California, Colorado, Delaware, New York, North Dakota, Ohio, Texas, Utah, Virginia, Washington and Wisconsin.
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