Yum China (NYSE:YUMC) and Del Frisco’s Restaurant Group (NASDAQ:DFRG) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, earnings and profitability.
Insider and Institutional Ownership
81.6% of Yum China shares are held by institutional investors. Comparatively, 96.6% of Del Frisco’s Restaurant Group shares are held by institutional investors. 0.4% of Yum China shares are held by company insiders. Comparatively, 2.0% of Del Frisco’s Restaurant Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Yum China and Del Frisco’s Restaurant Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Yum China||$8.42 billion||1.97||$708.00 million||$1.53||28.89|
|Del Frisco’s Restaurant Group||$378.22 million||0.71||-$76.30 million||($0.18)||-44.33|
Yum China has higher revenue and earnings than Del Frisco’s Restaurant Group. Del Frisco’s Restaurant Group is trading at a lower price-to-earnings ratio than Yum China, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and recommmendations for Yum China and Del Frisco’s Restaurant Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Del Frisco’s Restaurant Group||0||1||0||0||2.00|
Yum China currently has a consensus target price of $51.97, indicating a potential upside of 17.58%. Del Frisco’s Restaurant Group has a consensus target price of $8.00, indicating a potential upside of 0.25%. Given Yum China’s stronger consensus rating and higher possible upside, research analysts clearly believe Yum China is more favorable than Del Frisco’s Restaurant Group.
Volatility and Risk
Yum China has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, Del Frisco’s Restaurant Group has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500.
Yum China pays an annual dividend of $0.48 per share and has a dividend yield of 1.1%. Del Frisco’s Restaurant Group does not pay a dividend. Yum China pays out 31.4% of its earnings in the form of a dividend.
This table compares Yum China and Del Frisco’s Restaurant Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Del Frisco’s Restaurant Group||-20.75%||-3.98%||-1.04%|
Yum China beats Del Frisco’s Restaurant Group on 13 of the 16 factors compared between the two stocks.
Yum China Company Profile
Yum China Holdings, Inc. owns, operates, and franchises restaurants in China. The company operates in two segments, KFC and Pizza Hut. It operates restaurants under the KFC, Pizza Hut, Taco Bell, East Dawning, Little Sheep, and COFFii & JOY brands, which specialize in chicken, pizza, hot pot cooking, Chinese food, Mexican-style food, and coffee categories. The company also provides online food delivery services. As of December 31, 2018, it operated approximately 5,900 KFC restaurants; 2,200 Pizza Hut restaurants; 280 Little Sheep units; 14 East Dawning restaurants; 4 Taco Bell restaurants; and 13 COFFii & JOY units. Yum China Holdings, Inc. was incorporated in 2016 and is headquartered in Shanghai, the People's Republic of China.
Del Frisco’s Restaurant Group Company Profile
Del Frisco's Restaurant Group, Inc. develops, owns, and operates restaurants in the United States. It owns and operates restaurants under the Del Frisco's Double Eagle Steak House, Del Frisco's Grille, Barcelona Wine Bar, and bartaco brand names. The company offers steaks, as well as other menu selections, such as chops, fresh seafood, tapas, street food, and wines and cocktails. As of November 6, 2018, it operated 69 restaurants in 16 states and the District of Columbia. The company was founded in 1981 and is headquartered in Irving, Texas.
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