Comparing Restaurant Brands International (NYSE:QSR) & Monarch Casino & Resort (NASDAQ:MCRI)

Monarch Casino & Resort (NASDAQ:MCRI) and Restaurant Brands International (NYSE:QSR) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Volatility and Risk

Monarch Casino & Resort has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500. Comparatively, Restaurant Brands International has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500.

Dividends

Monarch Casino & Resort pays an annual dividend of $1.20 per share and has a dividend yield of 1.1%. Restaurant Brands International pays an annual dividend of $2.60 per share and has a dividend yield of 3.6%. Monarch Casino & Resort pays out 19.0% of its earnings in the form of a dividend. Restaurant Brands International pays out 69.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Restaurant Brands International has increased its dividend for 10 consecutive years. Restaurant Brands International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

62.4% of Monarch Casino & Resort shares are held by institutional investors. Comparatively, 82.3% of Restaurant Brands International shares are held by institutional investors. 26.3% of Monarch Casino & Resort shares are held by company insiders. Comparatively, 1.2% of Restaurant Brands International shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for Monarch Casino & Resort and Restaurant Brands International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Monarch Casino & Resort	0	4	2	1	2.57
Restaurant Brands International	0	9	16	0	2.64

Monarch Casino & Resort currently has a consensus target price of $123.40, suggesting a potential upside of 11.63%. Restaurant Brands International has a consensus target price of $83.92, suggesting a potential upside of 15.86%. Given Restaurant Brands International’s stronger consensus rating and higher possible upside, analysts clearly believe Restaurant Brands International is more favorable than Monarch Casino & Resort.

Earnings and Valuation

This table compares Monarch Casino & Resort and Restaurant Brands International”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Monarch Casino & Resort	$545.12 million	3.63	$101.39 million	$6.31	17.52
Restaurant Brands International	$9.43 billion	2.68	$776.00 million	$3.72	19.47

Restaurant Brands International has higher revenue and earnings than Monarch Casino & Resort. Monarch Casino & Resort is trading at a lower price-to-earnings ratio than Restaurant Brands International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Monarch Casino & Resort and Restaurant Brands International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Monarch Casino & Resort	20.35%	20.60%	15.79%
Restaurant Brands International	15.35%	33.89%	7.11%

About Monarch Casino & Resort

Monarch Casino & Resort, Inc. engages in the ownership and operation of the Atlantis Casino Resort Spa, a hotel and casino facility in Reno, Nevada, and the Monarch Black Hawk Casino in Black Hawk, Colorado. The company was founded in 1993 and is headquartered in Reno, NV.

About Restaurant Brands International

Restaurant Brands International Inc. operates as a quick-service restaurant company in Canada, the United States, and internationally. It operates through four segments: Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), and Firehouse Subs (FHS). The company owns and franchises TH chain of donut/coffee/tea restaurants that offer blend coffee, tea, and espresso-based hot and cold specialty drinks; and fresh baked goods, including donuts, Timbits, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps, soups, and other food products. It is also involved in owning and franchising BK, a fast-food hamburger restaurant chain, which offers flame-grilled hamburgers, chicken and other specialty sandwiches, French fries, soft drinks, and other food items; and PLK quick service restaurants that provide Louisiana-style fried chicken, chicken tenders, fried shrimp and other seafood, red beans and rice, and other regional items. In addition, the company owns and franchises FHS quick service restaurants that offer meats and cheese, chopped salads, chili and soups, signature and other sides, soft drinks, and local specialties. The company was founded in 1954 and is headquartered in Toronto, Canada.