Portillo’s (NASDAQ:PTLO) versus Yum China (NYSE:YUMC) Financial Review

Portillo’s (NASDAQ:PTLO) and Yum China (NYSE:YUMC) are both retail/wholesale companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, dividends, earnings and risk.

Analyst Ratings

This is a breakdown of current ratings and target prices for Portillo’s and Yum China, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Portillo’s	1	9	3	0	2.15
Yum China	0	1	3	0	2.75

Portillo’s currently has a consensus price target of $7.50, indicating a potential upside of 44.79%. Yum China has a consensus price target of $59.05, indicating a potential upside of 19.22%. Given Portillo’s’ higher possible upside, research analysts clearly believe Portillo’s is more favorable than Yum China.

Valuation & Earnings

This table compares Portillo’s and Yum China”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Portillo’s	$732.07 million	0.53	$19.34 million	$0.27	19.19
Yum China	$11.80 billion	1.48	$929.00 million	$2.51	19.73

Yum China has higher revenue and earnings than Portillo’s. Portillo’s is trading at a lower price-to-earnings ratio than Yum China, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Portillo’s and Yum China’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Portillo’s	2.64%	3.93%	1.24%
Yum China	7.87%	14.65%	8.48%

Risk and Volatility

Portillo’s has a beta of 1.75, suggesting that its share price is 75% more volatile than the S&P 500. Comparatively, Yum China has a beta of 0.11, suggesting that its share price is 89% less volatile than the S&P 500.

Insider and Institutional Ownership

98.3% of Portillo’s shares are owned by institutional investors. Comparatively, 85.6% of Yum China shares are owned by institutional investors. 6.1% of Portillo’s shares are owned by insiders. Comparatively, 0.4% of Yum China shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Yum China beats Portillo’s on 9 of the 13 factors compared between the two stocks.

About Portillo’s

Portillo’s Inc. owns and operates fast casual restaurants in the United States. The company offers Chicago-style hot dogs and sausages, Italian beef sandwiches, char-grilled burgers, chopped salads, crinkle-cut French fries, homemade chocolate cakes, and chocolate cake shake. It offers its products through its website, application, and certain third-party platforms. Portillo’s Inc. was founded in 1963 and is based in Oak Brook, Illinois.

About Yum China

Yum China Holdings, Inc. owns, operates, and franchises restaurants in the People's Republic of China. The company operates through KFC, Pizza Hut, and All Other segments. It operates restaurants under the KFC, Pizza Hut, Taco Bell, Lavazza, Little Sheep, and Huang Ji Huang concepts. The company also operates V-Gold Mall, a mobile e-commerce platform to sell products; and offers online food deliver services. Yum China Holdings, Inc. was founded in 1987 and is headquartered in Shanghai, the People's Republic of China.