Head-To-Head Analysis: Red Robin Gourmet Burgers (RRGB) versus Yum! Brands (YUM)
Red Robin Gourmet Burgers (NASDAQ: RRGB) and Yum! Brands (NYSE:YUM) are both cyclical consumer goods & services companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, profitability, institutional ownership and analyst recommendations.
Yum! Brands pays an annual dividend of $1.20 per share and has a dividend yield of 1.5%. Red Robin Gourmet Burgers does not pay a dividend. Yum! Brands pays out 37.0% of its earnings in the form of a dividend. Red Robin Gourmet Burgers has raised its dividend for 8 consecutive years.
Valuation & Earnings
This table compares Red Robin Gourmet Burgers and Yum! Brands’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Red Robin Gourmet Burgers||$1.30 billion||0.55||$11.72 million||$0.96||57.34|
|Yum! Brands||$6.37 billion||4.36||$1.62 billion||$3.24||25.43|
Yum! Brands has higher revenue and earnings than Red Robin Gourmet Burgers. Yum! Brands is trading at a lower price-to-earnings ratio than Red Robin Gourmet Burgers, indicating that it is currently the more affordable of the two stocks.
This table compares Red Robin Gourmet Burgers and Yum! Brands’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Red Robin Gourmet Burgers||0.94%||7.32%||2.94%|
Institutional & Insider Ownership
73.7% of Yum! Brands shares are held by institutional investors. 2.7% of Red Robin Gourmet Burgers shares are held by insiders. Comparatively, 7.4% of Yum! Brands shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This is a breakdown of recent recommendations and price targets for Red Robin Gourmet Burgers and Yum! Brands, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Red Robin Gourmet Burgers||0||5||6||0||2.55|
Red Robin Gourmet Burgers presently has a consensus price target of $69.10, suggesting a potential upside of 25.52%. Yum! Brands has a consensus price target of $80.40, suggesting a potential downside of 2.43%. Given Red Robin Gourmet Burgers’ stronger consensus rating and higher probable upside, research analysts plainly believe Red Robin Gourmet Burgers is more favorable than Yum! Brands.
Volatility & Risk
Red Robin Gourmet Burgers has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500. Comparatively, Yum! Brands has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.
Yum! Brands beats Red Robin Gourmet Burgers on 11 of the 17 factors compared between the two stocks.
Red Robin Gourmet Burgers Company Profile
Red Robin Gourmet Burgers, Inc., together with its subsidiaries, primarily develops, operates, and franchises full-service restaurants in North America and focuses on serving selection of gourmet burgers. The Company’s menu features a line of gourmet burgers, which it makes from ground beef, as well as its line of Red’s Tavern Double Burgers and its Red Robin’s line of half-pound Angus beef burgers with various toppings. The Company also offers burgers made from chicken breasts, fish fillets, turkey patties, as well as vegetarian and vegan options. The Company offered a selection of buns, including ciabatta, gluten free, sesame, onion, whole grain, jalapeno and lettuce wraps a range of toppings, including fresh guacamole, house made barbeque sauces, aiolis, grilled pineapple, crispy onion straws, sauteed mushrooms, fried jalapenos, bruschetta salsa, coleslaw, eight different cheese choices and a fried egg, as of December 25, 2016.
Yum! Brands Company Profile
YUM! Brands, Inc. is engaged in restaurant business. As of December 31, 2016, the Company operated or franchised over 43,500 restaurants in more than 135 countries and territories operating under the KFC, Pizza Hut or Taco Bell (collectively the Concepts) brands. The Company operates through three segments: The KFC Division, which includes the operations of the KFC concept around the world; The Pizza Hut Division, which includes the operations of the Pizza Hut concept around the world, and The Taco Bell Division, which includes the operations of the Taco Bell concept around the world. KFC restaurants across the world offer fried and non-fried chicken products, such as sandwiches, chicken strips, chicken-on-the-bone and other chicken products. Pizza Hut is a restaurant chain specialized in the sale of ready-to-eat pizza products. Taco Bell specializes in Mexican-style food products, including various types of tacos, burritos, quesadillas, salads, nachos and other related items.
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