Habit Restaurants (HABT) and Restaurant Brands International (QSR) Head-To-Head Analysis

Habit Restaurants (NASDAQ: HABT) and Restaurant Brands International (NYSE:QSR) are both cyclical consumer goods & services companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, valuation, risk and profitability.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Habit Restaurants and Restaurant Brands International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Habit Restaurants 0 5 3 0 2.38
Restaurant Brands International 0 4 13 0 2.76

Habit Restaurants currently has a consensus target price of $15.94, indicating a potential upside of 66.88%. Restaurant Brands International has a consensus target price of $69.60, indicating a potential upside of 13.86%. Given Habit Restaurants’ higher probable upside, equities analysts clearly believe Habit Restaurants is more favorable than Restaurant Brands International.

Valuation and Earnings

This table compares Habit Restaurants and Restaurant Brands International’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Habit Restaurants $283.81 million 0.88 $4.66 million $0.23 41.52
Restaurant Brands International $4.15 billion 3.50 $615.60 million $1.44 42.45

Restaurant Brands International has higher revenue and earnings than Habit Restaurants. Habit Restaurants 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 Habit Restaurants and Restaurant Brands International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Habit Restaurants 1.46% 4.09% 1.75%
Restaurant Brands International 12.40% 23.53% 4.12%

Dividends

Restaurant Brands International pays an annual dividend of $0.84 per share and has a dividend yield of 1.4%. Habit Restaurants does not pay a dividend. Restaurant Brands International pays out 58.3% of its earnings in the form of a dividend.

Institutional & Insider Ownership

76.3% of Habit Restaurants shares are owned by institutional investors. Comparatively, 78.4% of Restaurant Brands International shares are owned by institutional investors. 16.1% of Habit Restaurants shares are owned by insiders. Comparatively, 3.1% of Restaurant Brands International shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Restaurant Brands International beats Habit Restaurants on 12 of the 15 factors compared between the two stocks.

Habit Restaurants Company Profile

The Habit Restaurants, Inc. (Habit Burger Grill) is a fast casual restaurant company. The Company is engaged in preparing made-to-order char-grilled burgers and sandwiches featuring tri-tip steak, grilled chicken and sushi-grade albacore tuna cooked over an open flame. In addition, it offers sides, shakes and malts. The Company prepares its burgers with char-grilled preparation, topped with caramelized onions, melted cheese, lettuce and tomatoes. It operates a range of restaurant formats, including end-cap, free-standing, inline, end-cap drive-thru and traditional stand-alone drive-in, primarily within suburban shopping centers and retail settings. As of December 27, 2016, the Company had 172 locations in 15 markets in 10 states and the United Arab Emirates, including franchised/licensed locations (excluding six licensed locations in Santa Barbara County, California).

Restaurant Brands International Company Profile

Restaurant Brands International Inc. is a quick service restaurant (QSR) company. The Company had over 20,000 restaurants in more than 100 countries and the United States territories, as of December 31, 2016. It operates through two segments: Tim Hortons (TH) and Burger King (BK). Tim Hortons restaurants are quick service restaurants with a menu that includes blend coffee, tea, espresso-based hot and cold specialty drinks, baked goods, including donuts, Timbits, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps and soups, among others. Burger King restaurants are quick service restaurants that feature flame-grilled hamburgers, chicken and other specialty sandwiches, French fries, soft drinks and other food items. The Company operates coffee roasting facilities in Hamilton, Ontario and Rochester, New York. The Company sells its raw materials and supplies, including coffee, sugar, paper goods and other restaurant supplies to Tim Hortons restaurants.

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