Analyzing Wingstop (NASDAQ:WING) & Tabcorp (OTCMKTS:TACBY)

Tabcorp (OTCMKTS:TACBY) and Wingstop (NASDAQ:WING) are both consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Dividends

Tabcorp pays an annual dividend of $0.30 per share and has a dividend yield of 39.7%. Wingstop pays an annual dividend of $1.32 per share and has a dividend yield of 1.2%. Tabcorp pays out 87.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Wingstop pays out 31.4% of its earnings in the form of a dividend. Wingstop has raised its dividend for 7 consecutive years.

Profitability

This table compares Tabcorp and Wingstop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tabcorp	N/A	N/A	N/A
Wingstop	16.15%	-16.31%	18.05%

Valuation and Earnings

This table compares Tabcorp and Wingstop”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tabcorp	N/A	N/A	N/A	$0.34	2.19
Wingstop	$696.85 million	4.28	$174.27 million	$4.21	26.03

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

Analyst Ratings

This is a breakdown of current ratings and target prices for Tabcorp and Wingstop, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tabcorp	0	0	0	0	0.00
Wingstop	2	5	22	2	2.77

Wingstop has a consensus price target of $241.81, suggesting a potential upside of 120.63%. Given Wingstop’s stronger consensus rating and higher possible upside, analysts plainly believe Wingstop is more favorable than Tabcorp.

Insider & Institutional Ownership

0.0% of Tabcorp shares are owned by institutional investors. 0.5% of Wingstop shares are owned by company 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

Wingstop beats Tabcorp on 12 of the 15 factors compared between the two stocks.

About Tabcorp

Tabcorp Holdings Limited, together with its subsidiaries, provides gambling and entertainment services in Australia. It operates through Wagering and Media, and Gaming Services segments. The Wagering and Media segment offers through a network of TAB agencies, hotels and clubs, and on-course operations, as well as through retail, Internet, mobile devices, and phone. It also provides Trackside, a computer simulate racing product; and international wagering and pooling services. In addition, the company engages in the Sky Racing television channels broadcasting thoroughbred, and harness and greyhound racing to audiences; Sky Racing Active, a digital app providing Sky Racing's live and on-demand racing content across thoroughbred, and harness and greyhound racing; and Sky Sports Radio network. The Gaming Services segment offers electronic gaming machine (EGM) monitoring and related services; and provides MAX performance solutions, technical services, and integrated systems, as well as provides products, technology, financing, support, maintenance, and other gaming services. The company was founded in 1881 and is based in Melbourne, Australia.

About Wingstop

Wingstop Inc., together with its subsidiaries, franchises and operates restaurants under the Wingstop brand. Its restaurants offer classic wings, boneless wings, tenders, and hand-sauced-and-tossed in various flavors, as well as chicken sandwiches with fries and hand-cut carrots and celery that are cooked-to-order. The company was founded in 1994 and is headquartered in Addison, Texas.