Restaurant Brands International (NYSE:QSR) and Aramark (NYSE:ARMK) are both large-cap retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.
Analyst Recommendations
This is a summary of current recommendations and price targets for Restaurant Brands International and Aramark, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Restaurant Brands International | 1 | 6 | 18 | 0 | 2.68 |
Aramark | 0 | 9 | 4 | 0 | 2.31 |
Restaurant Brands International presently has a consensus price target of $65.1818, suggesting a potential upside of 4.14%. Aramark has a consensus price target of $31.4167, suggesting a potential downside of 22.68%. Given Restaurant Brands International's stronger consensus rating and higher possible upside, analysts clearly believe Restaurant Brands International is more favorable than Aramark.
Institutional & Insider Ownership
79.5% of Restaurant Brands International shares are owned by institutional investors. Comparatively, 93.5% of Aramark shares are owned by institutional investors. 3.7% of Restaurant Brands International shares are owned by insiders. Comparatively, 10.3% of Aramark shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Volatility & Risk
Restaurant Brands International has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500. Comparatively, Aramark has a beta of 1.88, suggesting that its share price is 88% more volatile than the S&P 500.
Dividends
Restaurant Brands International pays an annual dividend of $2.08 per share and has a dividend yield of 3.3%. Aramark pays an annual dividend of $0.44 per share and has a dividend yield of 1.1%. Restaurant Brands International pays out 76.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Aramark pays out -258.8% of its earnings in the form of a dividend. Restaurant Brands International has increased its dividend for 6 consecutive years and Aramark has increased its dividend for 1 consecutive years. Restaurant Brands International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Restaurant Brands International and Aramark's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Restaurant Brands International | $5.60 billion | 3.41 | $643 million | $2.72 | 23.01 |
Aramark | $12.83 billion | 0.80 | $-461,530,000.00 | ($0.17) | -239.00 |
Restaurant Brands International has higher earnings, but lower revenue than Aramark. Aramark 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 Restaurant Brands International and Aramark's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Restaurant Brands International | 11.00% | 26.67% | 4.70% |
Aramark | -3.60% | -1.48% | -0.30% |
Summary
Restaurant Brands International beats Aramark on 12 of the 17 factors compared between the two stocks.