Wendy’s (WEN) and Its Rivals Head to Head Contrast

Wendy’s (NASDAQ:WEN) is one of 383 publicly-traded companies in the “Hotels, Restaurants & Leisure” industry, but how does it contrast to its rivals? We will compare Wendy’s to related businesses based on the strength of its risk, dividends, earnings, valuation, institutional ownership, analyst recommendations and profitability.

Risk and Volatility

Wendy’s has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500. Comparatively, Wendy’s’ rivals have a beta of 1.42, suggesting that their average share price is 42% more volatile than the S&P 500.

Profitability

This table compares Wendy’s and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wendy’s	4.40%	93.77%	2.28%
Wendy’s Competitors	8.44%	-42.19%	1.97%

Insider and Institutional Ownership

86.0% of Wendy’s shares are owned by institutional investors. Comparatively, 48.6% of shares of all “Hotels, Restaurants & Leisure” companies are owned by institutional investors. 17.1% of Wendy’s shares are owned by company insiders. Comparatively, 22.0% of shares of all “Hotels, Restaurants & Leisure” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Wendy’s pays an annual dividend of $0.28 per share and has a dividend yield of 3.4%. Wendy’s pays out 54.9% of its earnings in the form of a dividend. As a group, “Hotels, Restaurants & Leisure” companies pay a dividend yield of 3.2% and pay out 38.8% of their earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Wendy’s and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wendy’s	6	11	1	0	1.72
Wendy’s Competitors	3839	17331	25651	910	2.50

Wendy’s currently has a consensus target price of $7.56, indicating a potential downside of 8.67%. As a group, “Hotels, Restaurants & Leisure” companies have a potential upside of 52.98%. Given Wendy’s’ rivals stronger consensus rating and higher probable upside, analysts clearly believe Wendy’s has less favorable growth aspects than its rivals.

Valuation & Earnings

This table compares Wendy’s and its rivals revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Wendy’s	$2.20 billion	$165.07 million	16.24
Wendy’s Competitors	$3.43 billion	$250.18 million	-160.79

Wendy’s’ rivals have higher revenue and earnings than Wendy’s. Wendy’s is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Summary

Wendy’s rivals beat Wendy’s on 10 of the 15 factors compared.

Wendy’s Company Profile

The Wendy’s Company operates and franchises quick-service restaurants under the Wendy’s name. Founded by Dave Thomas in Columbus, Ohio, in 1969, the chain is known for hamburgers made with fresh, never-frozen beef in the United States, along with chicken sandwiches, nuggets, fries, salads and its signature Frosty dessert. Wendy’s restaurants also offer breakfast items and a range of beverages. The company serves customers in the United States and international markets through a mix of company-operated and franchised locations.