Rave Restaurant Group (NASDAQ:RAVE) versus Restaurant Brands International (NYSE:QSR) Head-To-Head Analysis

Rave Restaurant Group (NASDAQ:RAVE) and Restaurant Brands International (NYSE:QSR) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, valuation, profitability, dividends and institutional ownership.

Valuation & Earnings

This table compares Rave Restaurant Group and Restaurant Brands International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rave Restaurant Group	$12.63 million	3.24	$2.70 million	$0.21	13.71
Restaurant Brands International	$9.43 billion	2.69	$776.00 million	$3.72	19.59

Restaurant Brands International has higher revenue and earnings than Rave Restaurant Group. Rave Restaurant Group is trading at a lower price-to-earnings ratio than Restaurant Brands International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Rave Restaurant Group and Restaurant Brands International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rave Restaurant Group	23.19%	19.22%	16.81%
Restaurant Brands International	13.12%	33.43%	6.94%

Risk & Volatility

Rave Restaurant Group has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500. Comparatively, Restaurant Brands International has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Rave Restaurant Group and Restaurant Brands International, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rave Restaurant Group	0	1	0	0	2.00
Restaurant Brands International	0	7	16	0	2.70

Restaurant Brands International has a consensus price target of $84.04, suggesting a potential upside of 15.31%. Given Restaurant Brands International’s stronger consensus rating and higher possible upside, analysts clearly believe Restaurant Brands International is more favorable than Rave Restaurant Group.

Institutional and Insider Ownership

15.1% of Rave Restaurant Group shares are held by institutional investors. Comparatively, 82.3% of Restaurant Brands International shares are held by institutional investors. 28.0% of Rave Restaurant Group shares are held by company insiders. Comparatively, 1.2% of Restaurant Brands International shares are held by company 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

Restaurant Brands International beats Rave Restaurant Group on 10 of the 14 factors compared between the two stocks.

About Rave Restaurant Group

Rave Restaurant Group, Inc., together with its subsidiaries, engages in the operation and franchising of pizza buffet, delivery/carry-out (delco), and express restaurants under the Pizza Inn and Pie Five trademarks in the United States and internationally. The company operates through three segments: Pizza Inn Franchising, Pie Five Franchising, and Company-Owned Restaurants. Its buffet restaurants are located in free standing buildings or strip centers in retail developments that offer dine-in, carryout, and catering services, as well as delivery services. The company’s delco restaurants provide delivery and carryout services and are located in shopping centers or other in-line retail developments. Its Express restaurants serve customers through various non-traditional points of sale and are located in convenience stores, food courts, college campuses, airport terminals, travel plazas, athletic facilities, or other commercial facilities. The company’s Pizza Inn Express restaurants serve customers through a non-traditional, licensed, pizza-only model called Pizza Inn Express, located at production-oriented facilities. In addition, it operates and franchises fast casual restaurants under the Pie Five Pizza Company or Pie Five trademarks. The company was formerly known as Pizza Inn Holdings, Inc. and changed its name to Rave Restaurant Group, Inc. in January 2015. Rave Restaurant Group, Inc. was founded in 1958 and is based in The Colony, Texas.

About Restaurant Brands International

Restaurant Brands International Inc. operates as a quick-service restaurant company in Canada, the United States, and internationally. It operates through four segments: Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), and Firehouse Subs (FHS). The company owns and franchises TH chain of donut/coffee/tea restaurants that offer blend coffee, tea, and espresso-based hot and cold specialty drinks; and fresh baked goods, including donuts, Timbits, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps, soups, and other food products. It is also involved in owning and franchising BK, a fast-food hamburger restaurant chain, which offers flame-grilled hamburgers, chicken and other specialty sandwiches, French fries, soft drinks, and other food items; and PLK quick service restaurants that provide Louisiana-style fried chicken, chicken tenders, fried shrimp and other seafood, red beans and rice, and other regional items. In addition, the company owns and franchises FHS quick service restaurants that offer meats and cheese, chopped salads, chili and soups, signature and other sides, soft drinks, and local specialties. The company was founded in 1954 and is headquartered in Toronto, Canada.