Head-To-Head Review: Wendy’s Company (The) (WEN) vs. Del Taco Restaurants (TACO)
Wendy’s Company (The) (NASDAQ: WEN) and Del Taco Restaurants (NASDAQ:TACO) are both retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their profitabiliy, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.
This table compares Wendy’s Company (The) and Del Taco Restaurants’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Wendy’s Company (The)||9.43%||16.31%||2.45%|
|Del Taco Restaurants||4.81%||5.90%||3.08%|
Institutional & Insider Ownership
77.8% of Wendy’s Company (The) shares are owned by institutional investors. Comparatively, 66.8% of Del Taco Restaurants shares are owned by institutional investors. 26.5% of Wendy’s Company (The) shares are owned by insiders. Comparatively, 14.6% of Del Taco Restaurants 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.
Valuation and Earnings
This table compares Wendy’s Company (The) and Del Taco Restaurants’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Wendy’s Company (The)||$1.34 billion||2.83||$371.36 million||$0.48||32.23|
|Del Taco Restaurants||$468.58 million||1.05||$67.62 million||$0.56||22.75|
Wendy’s Company (The) has higher revenue and earnings than Del Taco Restaurants. Del Taco Restaurants is trading at a lower price-to-earnings ratio than Wendy’s Company (The), indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations for Wendy’s Company (The) and Del Taco Restaurants, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Wendy’s Company (The)||0||8||7||0||2.47|
|Del Taco Restaurants||0||1||5||0||2.83|
Wendy’s Company (The) presently has a consensus target price of $15.46, indicating a potential downside of 0.05%. Del Taco Restaurants has a consensus target price of $15.67, indicating a potential upside of 22.97%. Given Del Taco Restaurants’ stronger consensus rating and higher probable upside, analysts clearly believe Del Taco Restaurants is more favorable than Wendy’s Company (The).
Wendy’s Company (The) pays an annual dividend of $0.28 per share and has a dividend yield of 1.8%. Del Taco Restaurants does not pay a dividend. Wendy’s Company (The) pays out 58.3% of its earnings in the form of a dividend.
Volatility & Risk
Wendy’s Company (The) has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, Del Taco Restaurants has a beta of -0.21, indicating that its share price is 121% less volatile than the S&P 500.
Wendy’s Company (The) beats Del Taco Restaurants on 11 of the 16 factors compared between the two stocks.
Wendy’s Company (The) Company Profile
The Wendy’s Company is the parent company of subsidiary holding company Wendy’s Restaurants, LLC (Wendy’s Restaurants). Wendy’s Restaurants is the parent company of Wendy’s International, LLC (Wendy’s), which is the owner and franchisor of the Wendy’s restaurant system in the United States. Wendy’s is a restaurant company specializing in the hamburger sandwich segment. Wendy’s is engaged in the business of operating, developing and franchising a system of restaurants serving food. The Company operated approximately 6,080 Wendy’s restaurants in operation in North America, as of January 1, 2017. Of these restaurants, 330 were operated by the Company and 5,768 by a total of 376 franchisees, as of January 1, 2017. In addition, as of January 1, 2017, there were 439 franchised Wendy’s restaurants in operation in 29 countries and territories other than North America. Wendy’s is also a partner in a restaurant real estate joint venture with a subsidiary of Restaurant Brands International Inc.
Del Taco Restaurants Company Profile
Del Taco Restaurants, Inc. is an operator and franchisor of restaurants featuring made-to-order cuisine, including both Mexican inspired and American classic dishes. As of January 3, 2017, the Company operated 551 Del Taco restaurants. The Company’s menu offers a combination of Mexican-inspired food, such as tacos and burritos, and American classics, such as Double Del cheeseburgers, crinkle-cut fries and milkshakes. The Company’s menu features items, such as its Platos plated meals, Epic Burritos, Handcrafted Ensaladas and Fresca Bowls, as well as items on its Buck & Under Menu. As of January 3, 2017, the Company had 310 Company-operated and 241 franchise-operated restaurants. The Platos menu offering consists of individually plated meals complete with an entree, two sides, and chips and salsa. The Company’s menu also includes quesadillas, bowls and handcrafted ensaladas, as well as burgers and fries.
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