Dutch Bros (NYSE:BROS) vs. Yum China (NYSE:YUMC) Critical Contrast

Dutch Bros (NYSE:BROS) and Yum China (NYSE:YUMC) are both large-cap retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, dividends, analyst recommendations, institutional ownership, risk and valuation.

Valuation & Earnings

This table compares Dutch Bros and Yum China”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dutch Bros	$1.64 billion	7.66	$79.84 million	$0.64	112.28
Yum China	$12.09 billion	1.18	$929.00 million	$2.61	15.69

Yum China has higher revenue and earnings than Dutch Bros. Yum China is trading at a lower price-to-earnings ratio than Dutch Bros, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Dutch Bros and Yum China’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dutch Bros	4.61%	9.42%	2.80%
Yum China	7.83%	15.11%	8.67%

Risk & Volatility

Dutch Bros has a beta of 2.36, meaning that its stock price is 136% more volatile than the S&P 500. Comparatively, Yum China has a beta of 0.09, meaning that its stock price is 91% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Dutch Bros and Yum China, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dutch Bros	0	3	20	1	2.92
Yum China	0	1	3	0	2.75

Dutch Bros currently has a consensus price target of $77.00, suggesting a potential upside of 7.15%. Yum China has a consensus price target of $59.05, suggesting a potential upside of 44.20%. Given Yum China’s higher probable upside, analysts clearly believe Yum China is more favorable than Dutch Bros.

Insider & Institutional Ownership

85.5% of Dutch Bros shares are held by institutional investors. Comparatively, 85.6% of Yum China shares are held by institutional investors. 38.9% of Dutch Bros shares are held by insiders. Comparatively, 0.4% of Yum China shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Yum China beats Dutch Bros on 8 of the 15 factors compared between the two stocks.

About Dutch Bros

Dutch Bros Inc., together with its subsidiaries, operates and franchises drive-thru shops in the United States. The company operates through Company-Operated Shops and Franchising and Other segments. It serves through company-operated shops and online channels under Dutch Bros; Dutch Bros Coffee; Dutch Bros Rebel; Dutch Bros; and Blue Rebel brands. Dutch Bros Inc. was founded in 1992 and is headquartered in Grants Pass, Oregon.

About Yum China

Yum China Holdings, Inc. owns, operates, and franchises restaurants in the People's Republic of China. The company operates through KFC, Pizza Hut, and All Other segments. It operates restaurants under the KFC, Pizza Hut, Taco Bell, Lavazza, Little Sheep, and Huang Ji Huang concepts. The company also operates V-Gold Mall, a mobile e-commerce platform to sell products; and offers online food deliver services. Yum China Holdings, Inc. was founded in 1987 and is headquartered in Shanghai, the People's Republic of China.