Financial Review: Yum! Brands (NYSE:YUM) versus J d Wetherspoon (OTCMKTS:JDWPY)

J d Wetherspoon (OTCMKTS:JDWPY) and Yum! Brands (NYSE:YUM) are both retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, valuation, analyst recommendations, profitability and earnings.

Analyst Recommendations

This is a summary of recent recommendations for J d Wetherspoon and Yum! Brands, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
J d Wetherspoon	0	0	0	0	0.00
Yum! Brands	0	12	12	0	2.50

Yum! Brands has a consensus price target of $166.29, indicating a potential upside of 11.72%. Given Yum! Brands’ stronger consensus rating and higher possible upside, analysts clearly believe Yum! Brands is more favorable than J d Wetherspoon.

Volatility and Risk

J d Wetherspoon has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, Yum! Brands has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500.

Institutional & Insider Ownership

82.4% of Yum! Brands shares are owned by institutional investors. 0.3% of Yum! Brands shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares J d Wetherspoon and Yum! Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
J d Wetherspoon	N/A	N/A	N/A
Yum! Brands	18.11%	-21.01%	24.18%

Valuation & Earnings

This table compares J d Wetherspoon and Yum! Brands”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
J d Wetherspoon	$2.76 billion	0.35	$88.36 million	N/A	N/A
Yum! Brands	$8.06 billion	5.12	$1.49 billion	$5.13	29.01

Yum! Brands has higher revenue and earnings than J d Wetherspoon.

Dividends

J d Wetherspoon pays an annual dividend of $1.03 per share and has a dividend yield of 2.4%. Yum! Brands pays an annual dividend of $2.84 per share and has a dividend yield of 1.9%. Yum! Brands pays out 55.4% of its earnings in the form of a dividend. Yum! Brands has increased its dividend for 8 consecutive years.

Summary

Yum! Brands beats J d Wetherspoon on 11 of the 15 factors compared between the two stocks.

About J d Wetherspoon

J D Wetherspoon plc owns and operates pubs and hotels in the United Kingdom and the Republic of Ireland. The company was founded in 1979 and is based in Watford, the United Kingdom.

About Yum! Brands

Yum! Brands, Inc., together with its subsidiaries, develops, operates, and franchises quick service restaurants worldwide. The company operates through the KFC Division, the Taco Bell Division, the Pizza Hut Division, and the Habit Burger Grill Division segments. It also operates restaurants under the KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill brands, which specialize in chicken, pizza, made-to-order chargrilled burgers, sandwiches, Mexican-style food categories, and other food products. The company was formerly known as TRICON Global Restaurants, Inc. and changed its name to Yum! Brands, Inc. in May 2002. Yum! Brands, Inc. was incorporated in 1997 and is headquartered in Louisville, Kentucky.