Zoe's Kitchen (NYSE: ZOES) and Papa John's Int'l (NASDAQ:PZZA) are both small-cap 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, analyst recommendations, earnings, valuation, profitability, risk and dividends.
Valuation & Earnings
This table compares Zoe's Kitchen and Papa John's Int'l’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Zoe's Kitchen||$275.96 million||1.22||$1.80 million||$0.02||859.50|
|Papa John's Int'l||$1.71 billion||1.16||$102.82 million||$2.90||19.62|
This is a breakdown of current ratings and price targets for Zoe's Kitchen and Papa John's Int'l, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Papa John's Int'l||0||7||3||0||2.30|
Zoe's Kitchen currently has a consensus price target of $16.72, suggesting a potential downside of 2.72%. Papa John's Int'l has a consensus price target of $76.00, suggesting a potential upside of 33.57%. Given Papa John's Int'l’s higher possible upside, analysts plainly believe Papa John's Int'l is more favorable than Zoe's Kitchen.
Papa John's Int'l pays an annual dividend of $0.90 per share and has a dividend yield of 1.6%. Zoe's Kitchen does not pay a dividend. Papa John's Int'l pays out 31.0% of its earnings in the form of a dividend.
Volatility and Risk
Zoe's Kitchen has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Papa John's Int'l has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500.
This table compares Zoe's Kitchen and Papa John's Int'l’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Papa John's Int'l||6.12%||4,321.08%||19.07%|
Insider & Institutional Ownership
84.1% of Papa John's Int'l shares are held by institutional investors. 3.0% of Zoe's Kitchen shares are held by company insiders. Comparatively, 27.7% of Papa John's Int'l shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Papa John's Int'l beats Zoe's Kitchen on 10 of the 16 factors compared between the two stocks.
Zoe's Kitchen Company Profile
Zoe’s Kitchen, Inc. develops and operates fast-casual restaurants serving a menu of fresh, wholesome, Mediterranean-inspired dishes delivered with Southern hospitality. The Company’s menu offers meals made from scratch using produce, proteins and other ingredients, including its appetizers, soups, salads and kabobs. Its food, including both hot and cold items, is suited for catering to a range of business and social occasions. It caters to a range of dietary needs by offering vegetarian, vegan, gluten-free and its calorie conscious, Simply 500 menu selections. Its party packs serve groups of approximately 10 and are each filled with their own combination of fresh fruits, veggies, proteins and grains. The Company serves dishes for various occasions, such as Guilt-Free Girls Night, Game Day Goodies, Shower Sensations and Kids’ Party Pack. As of December 26, 2016, it had operated 201 Company-owned restaurants and three franchise restaurants in 20 states across the United States.
Papa John's Int'l Company Profile
Papa John’s International, Inc. (Papa John’s) operates and franchises pizza delivery and carryout restaurants and, in certain international markets, dine-in and delivery restaurants under the trademark Papa John’s. The Company operates through five segments: domestic Company-owned restaurants, North America commissaries, North America franchising, international operations and all other business units. North America is defined as the United States and Canada. Domestic is defined as the contiguous United States. International franchisees are defined as all franchise operations outside of the United States and Canada. As of December 25, 2016, there were 5,097 Papa John’s restaurants in operation, consisting of 744 Company-owned and 4,353 franchised restaurants operating domestically in all 50 states and in 45 countries and territories. It offers pizza along with side items, including breadsticks, cheesesticks, chicken poppers and wings, dessert items and canned or bottled beverages.
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