Popeyes Louisiana Kitchen (NASDAQ: PLKI) and Papa Murphy’s Holdings (NASDAQ:FRSH) are both cyclical consumer goods & services companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, earnings, risk, valuation and dividends.

Profitability

This table compares Popeyes Louisiana Kitchen and Papa Murphy’s Holdings’ 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%
Papa Murphy’s Holdings -8.43% 3.16% 1.15%

Risk and Volatility

Popeyes Louisiana Kitchen has a beta of -0.11, meaning that its stock price is 111% less volatile than the S&P 500. Comparatively, Papa Murphy’s Holdings has a beta of -0.01, meaning that its stock price is 101% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Popeyes Louisiana Kitchen and Papa Murphy’s Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Popeyes Louisiana Kitchen 1 4 1 0 2.00
Papa Murphy’s Holdings 0 4 0 0 2.00

Popeyes Louisiana Kitchen presently has a consensus target price of $69.75, suggesting a potential downside of 11.68%. Papa Murphy’s Holdings has a consensus target price of $4.75, suggesting a potential downside of 9.35%. Given Papa Murphy’s Holdings’ higher probable upside, analysts plainly believe Papa Murphy’s Holdings is more favorable than Popeyes Louisiana Kitchen.

Institutional & Insider Ownership

97.6% of Popeyes Louisiana Kitchen shares are owned by institutional investors. Comparatively, 36.5% of Papa Murphy’s Holdings shares are owned by institutional investors. 2.2% of Popeyes Louisiana Kitchen shares are owned by company insiders. Comparatively, 3.1% of Papa Murphy’s Holdings shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Popeyes Louisiana Kitchen and Papa Murphy’s Holdings’ 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
Papa Murphy’s Holdings $125.10 million 0.71 $16.53 million ($0.63) -8.32

Papa Murphy’s Holdings has higher revenue and earnings than Popeyes Louisiana Kitchen. Papa Murphy’s Holdings 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.

Summary

Popeyes Louisiana Kitchen beats Papa Murphy’s Holdings on 6 of the 10 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 Papa Murphy’s Holdings

Papa Murphy’s Holdings, Inc. is a holding company. The Company, together with its subsidiaries, is a franchisor and operator of the Take ‘N’ Bake pizza chain in the United States. The Company franchises the right to operate Take ‘N’ Bake pizza franchises and operates Take ‘N’ Bake pizza stores owned by the Company. The Company operates through three segments: Domestic Company Stores, Domestic Franchise and International. Its Domestic Franchise segment consists of its domestic franchised stores, which represent its system-wide stores and derives its revenues from franchise and development fees and the collection of franchise royalties. The Domestic Company Stores segment consists of its Company-owned stores in the United States and derives its revenues from retail sales of pizza and side items to the general public. Its International segment consists of its stores outside of the United States, all of which are franchised and derives its revenues from franchise and development fees.

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