Restaurant Brands International (QSR) vs. Potbelly Corporation (PBPB) Head-To-Head Comparison

Restaurant Brands International (NYSE: QSR) and Potbelly Corporation (NASDAQ:PBPB) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, analyst recommendations, risk, dividends and valuation.

Analyst Ratings

This is a summary of current ratings and target prices for Restaurant Brands International and Potbelly Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Restaurant Brands International 0 3 12 0 2.80
Potbelly Corporation 0 3 1 0 2.25

Restaurant Brands International presently has a consensus target price of $67.31, suggesting a potential upside of 0.12%. Potbelly Corporation has a consensus target price of $13.67, suggesting a potential upside of 9.33%. Given Potbelly Corporation’s higher possible upside, analysts plainly believe Potbelly Corporation is more favorable than Restaurant Brands International.

Dividends

Restaurant Brands International pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. Potbelly Corporation does not pay a dividend. Restaurant Brands International pays out 55.6% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Restaurant Brands International and Potbelly Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Restaurant Brands International $4.32 billion 3.68 $1.91 billion $1.44 46.69
Potbelly Corporation $415.98 million 0.75 $39.72 million $0.17 73.53

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

Risk & Volatility

Restaurant Brands International has a beta of 1.77, meaning that its stock price is 77% more volatile than the S&P 500. Comparatively, Potbelly Corporation has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.

Institutional & Insider Ownership

76.4% of Restaurant Brands International shares are owned by institutional investors. Comparatively, 72.8% of Potbelly Corporation shares are owned by institutional investors. 3.1% of Restaurant Brands International shares are owned by company insiders. Comparatively, 9.6% of Potbelly Corporation shares are owned 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Restaurant Brands International 12.66% 22.71% 3.99%
Potbelly Corporation 1.03% 8.68% 6.15%

Summary

Restaurant Brands International beats Potbelly Corporation on 12 of the 16 factors compared between the two stocks.

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.

Potbelly Corporation Company Profile

Potbelly Corporation owns and operates Potbelly Sandwich Works sandwich shops in the United States. The Company has domestic and international franchise operations of Potbelly Sandwich Works sandwich shops. As of December 25, 2016, the Company operated Potbelly Sandwich Works sandwich shops in 29 states and the District of Columbia. As of December 25, 2016, the Company had a domestic base of 441 shops in 29 states and the District of Columbia. Of these, the company operated 411 shops, and franchisees operated 30 shops, as of December 25, 2016. As of December 25, 2016, the Company had 13 international franchised shops, which included 11 shops in the Middle East, a shop in the United Kingdom and a shop in Canada. As of December 25, 2016, the Company had domestic franchise shops in Arkansas, Iowa, Illinois, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, South Dakota, Tennessee, Texas and Virginia.

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