Financial Analysis: TH International (NASDAQ:THCH) versus Darden Restaurants (NYSE:DRI)

Darden Restaurants (NYSE:DRI) and TH International (NASDAQ:THCH) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Darden Restaurants and TH International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Darden Restaurants	0	4	15	0	2.79
TH International	0	0	0	0	N/A

Darden Restaurants currently has a consensus price target of $178.85, indicating a potential upside of 20.84%. Given Darden Restaurants’ higher probable upside, analysts clearly believe Darden Restaurants is more favorable than TH International.

Earnings and Valuation

This table compares Darden Restaurants and TH International’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Darden Restaurants	$10.49 billion	1.68	$981.90 million	$8.53	17.35
TH International	$1.58 billion	0.03	-$123.81 million	($0.80)	-1.43

Darden Restaurants has higher revenue and earnings than TH International. TH International is trading at a lower price-to-earnings ratio than Darden Restaurants, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

93.6% of Darden Restaurants shares are held by institutional investors. Comparatively, 91.8% of TH International shares are held by institutional investors. 0.9% of Darden Restaurants shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Darden Restaurants has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500. Comparatively, TH International has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500.

Profitability

This table compares Darden Restaurants and TH International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Darden Restaurants	9.24%	49.94%	9.68%
TH International	-55.72%	-1,859.11%	-19.97%

Summary

Darden Restaurants beats TH International on 13 of the 13 factors compared between the two stocks.

About Darden Restaurants

Darden Restaurants, Inc., together with its subsidiaries, owns and operates full-service restaurants in the United States and Canada. It operates under Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze, Eddie V's Prime Seafood, and Capital Burger brand names. Darden Restaurants, Inc. was incorporated in 1995 and is based in Orlando, Florida.

About TH International

TH International Limited operates Tim Hortons coffee shops in mainland China, Hong Kong, and Macau. The company is based in Shanghai, the People's Republic of China. TH International Limited is a subsidiary of Tim Hortons Inc.