Popeyes Louisiana Kitchen (NASDAQ: PLKI) and Fogo de Chao (NASDAQ:FOGO) are both cyclical consumer goods & services companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitabiliy, earnings, analyst recommendations and risk.

Volatility and Risk

Popeyes Louisiana Kitchen has a beta of -0.11, indicating that its share price is 111% less volatile than the S&P 500. Comparatively, Fogo de Chao has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500.

Profitability

This table compares Popeyes Louisiana Kitchen and Fogo de Chao’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Popeyes Louisiana Kitchen 15.08% 490.51% 15.48%
Fogo de Chao 7.92% 8.32% 4.69%

Analyst Recommendations

This is a summary of recent recommendations for Popeyes Louisiana Kitchen and Fogo de Chao, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Popeyes Louisiana Kitchen 1 5 1 0 2.00
Fogo de Chao 0 3 3 0 2.50

Popeyes Louisiana Kitchen presently has a consensus price target of $67.00, indicating a potential downside of 15.16%. Fogo de Chao has a consensus price target of $16.42, indicating a potential upside of 19.83%. Given Fogo de Chao’s stronger consensus rating and higher probable upside, analysts plainly believe Fogo de Chao is more favorable than Popeyes Louisiana Kitchen.

Earnings and Valuation

This table compares Popeyes Louisiana Kitchen and Fogo de Chao’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Popeyes Louisiana Kitchen N/A N/A N/A $1.96 40.29
Fogo de Chao $295.79 million 1.31 $53.37 million $0.81 16.91

Fogo de Chao has higher revenue and earnings than Popeyes Louisiana Kitchen. Fogo de Chao is trading at a lower price-to-earnings ratio than Popeyes Louisiana Kitchen, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

97.6% of Popeyes Louisiana Kitchen shares are held by institutional investors. Comparatively, 92.4% of Fogo de Chao shares are held by institutional investors. 2.2% of Popeyes Louisiana Kitchen shares are held by insiders. Comparatively, 82.8% of Fogo de Chao shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Fogo de Chao beats Popeyes Louisiana Kitchen on 6 of the 11 factors compared between the two stocks.

About Popeyes Louisiana Kitchen

Popeyes Louisiana Kitchen, Inc. (Popeyes) develops, operates and franchises quick-service restaurants (QSRs) under the trade names Popeyes Louisiana Kitchen and Popeyes Chicken & Biscuits. The Company conducts its operations through two segments: franchise operations and Company-operated restaurants. The Company-operated restaurant segment includes the operation of Company-owned restaurants. The franchise operations segment consists of domestic and international franchising activities. The Company’s Louisiana style menu features spicy chicken, chicken tenders, fried shrimp and other seafood, red beans and rice, and other regional items. As of December 25, 2016, the Company operated and franchised 2,688 Popeyes restaurants in 48 states, the District of Columbia, three territories and 25 foreign countries. As of December 25, 2016, of the 55 Company-operated restaurants, approximately 84% were concentrated in Louisiana, North Carolina and Tennessee.

About Fogo de Chao

Fogo de Chao, Inc. is a United States-based holding company. The Company, through its subsidiaries, operates upscale Brazilian churrascaria steakhouses under the brand of Fogo de Chao. The Company owns 100% of Brasa (Purchaser) Inc. (Brasa Purchaser), which owns 100% of Brasa (Holdings) Inc. (Brasa Holdings). The Company operates through two segments: United States and Brazil. It specializes in fire-roasting meats utilizing the centuries-old Southern Brazilian cooking technique of churrasco. The Company offers its guests a tasting menu of meats featuring up to 20 cuts, simply seasoned and fire-roasted to expose their natural flavors. The Company operates approximately 26 restaurants in the United States, 10 in Brazil and one in Mexico. The Company operates a range of restaurant formats, including in-line and free-standing locations. Its restaurants range in size from approximately 7,000 to 16,000 square feet, with seating from 200 to 500 guests.

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