Head to Head Survey: El Pollo Loco Holdings (LOCO) & Papa John’s International (PZZA)
El Pollo Loco Holdings (NASDAQ: LOCO) and Papa John’s International (NASDAQ:PZZA) are both retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.
This is a breakdown of recent ratings and price targets for El Pollo Loco Holdings and Papa John’s International, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|El Pollo Loco Holdings||0||3||1||0||2.25|
|Papa John’s International||0||6||3||0||2.33|
El Pollo Loco Holdings currently has a consensus price target of $13.00, suggesting a potential upside of 30.00%. Papa John’s International has a consensus price target of $79.25, suggesting a potential upside of 35.56%. Given Papa John’s International’s stronger consensus rating and higher probable upside, analysts clearly believe Papa John’s International is more favorable than El Pollo Loco Holdings.
Papa John’s International pays an annual dividend of $0.90 per share and has a dividend yield of 1.5%. El Pollo Loco Holdings does not pay a dividend. Papa John’s International pays out 31.0% of its earnings in the form of a dividend.
This table compares El Pollo Loco Holdings and Papa John’s International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|El Pollo Loco Holdings||2.27%||9.14%||5.37%|
|Papa John’s International||6.12%||4,321.08%||19.07%|
Valuation and Earnings
This table compares El Pollo Loco Holdings and Papa John’s International’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|El Pollo Loco Holdings||$380.12 million||1.02||$18.33 million||$0.22||45.45|
|Papa John’s International||$1.71 billion||1.20||$102.82 million||$2.90||20.16|
Papa John’s International has higher revenue and earnings than El Pollo Loco Holdings. Papa John’s International is trading at a lower price-to-earnings ratio than El Pollo Loco Holdings, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
76.8% of El Pollo Loco Holdings shares are held by institutional investors. Comparatively, 87.5% of Papa John’s International shares are held by institutional investors. 45.9% of El Pollo Loco Holdings shares are held by insiders. Comparatively, 27.7% of Papa John’s International shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Volatility and Risk
El Pollo Loco Holdings has a beta of 0.35, indicating that its stock price is 65% less volatile than the S&P 500. Comparatively, Papa John’s International has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500.
Papa John’s International beats El Pollo Loco Holdings on 14 of the 16 factors compared between the two stocks.
El Pollo Loco Holdings Company Profile
El Pollo Loco Holdings, Inc. specializes in fire-grilling citrus-marinated chicken and operates in the limited service restaurant (LSR) segment. The Company’s menu features its signature product, citrus-marinated fire-grilled chicken, and a range of Mexican-inspired entrees that it creates from chicken. Every day in every restaurant, the Company marinates and fire-grills its chicken over open flames, and hand-slices whole tomatoes, avocados, serrano peppers and cilantro to make its salsas, guacamole and cilantro dressings from scratch. The Company also offers burritos, salads, tostadas, bowls, stuffed quesadillas and chicken entrees. The Company’s entrees include Chicken Avocado Burrito, Under 500 Calorie entrees, Ultimate Pollo Bowl, and Stuffed Chicken Avocado Quesadilla. As of December 28, 2016, the Company had 460 restaurants, consisting of 201 Company-operated and 259 franchised restaurants. The Company also offers additional proteins, such as shrimp, carnitas and beef.
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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