CEC Entertainment (CEC) and Yum! Brands (YUM) Head-To-Head Review

Yum! Brands (NYSE: YUM) and CEC Entertainment (NYSE:CEC) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, institutional ownership, profitability, valuation and earnings.

Analyst Recommendations

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This is a breakdown of current recommendations for Yum! Brands and CEC Entertainment, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yum! Brands 0 13 9 0 2.41
CEC Entertainment 0 0 0 0 N/A

Yum! Brands currently has a consensus target price of $82.29, indicating a potential downside of 3.67%.

Earnings & Valuation

This table compares Yum! Brands and CEC Entertainment’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Yum! Brands $5.88 billion 4.83 $1.34 billion $2.96 28.86
CEC Entertainment N/A N/A N/A N/A N/A

Yum! Brands has higher revenue and earnings than CEC Entertainment.

Profitability

This table compares Yum! Brands and CEC Entertainment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Yum! Brands 22.80% -17.27% 19.56%
CEC Entertainment N/A N/A N/A

Insider & Institutional Ownership

74.9% of Yum! Brands shares are held by institutional investors. 0.7% of Yum! Brands shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Yum! Brands pays an annual dividend of $1.44 per share and has a dividend yield of 1.7%. CEC Entertainment does not pay a dividend. Yum! Brands pays out 48.6% of its earnings in the form of a dividend.

Volatility & Risk

Yum! Brands has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, CEC Entertainment has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500.

Summary

Yum! Brands beats CEC Entertainment on 8 of the 10 factors compared between the two stocks.

About Yum! Brands

YUM! Brands, Inc., together with its subsidiaries, develops, operates, and franchises quick service restaurants worldwide. It operates in three segments: the KFC Division, the Pizza Hut Division, and the Taco Bell Division. The company operates restaurants under the KFC, Pizza Hut, and Taco Bell brands, which specialize in chicken, pizza, and Mexican-style food categories. As of December 31, 2017, it had 21,487 KFC units; 16,748 Pizza Hut units; and 6,849 Taco Bell units. The company was formerly known as TRICON Global Restaurants, Inc. and changed its name to YUM! Brands, Inc. in May 2002. YUM! Brands, Inc. was founded in 1997 and is headquartered in Louisville, Kentucky.

About CEC Entertainment

CEC Entertainment, Inc. is engaged in the family dining and entertainment center business. The Company develops, operates and franchises family dining and entertainment centers under the name Chuck E. Cheese’s. Chuck E. Cheese’s stores feature musical and comic entertainment by robotic and animated characters, arcade-style and skill-oriented games, video games, rides and other activities. All of its stores offer dining selections consisting of a range of beverages, pizzas, sandwiches, appetizers, a salad bar and desserts. As of January 1, 2012, the Company and its franchisees operated a total of 556 Chuck E. Cheese’s stores. As of January 1, 2012, it operated 507 Company-owned Chuck E. Cheese’s stores located in 44 states and Canada and its franchisees operated a total of 49 stores located in 15 states, Puerto Rico, Guam, Guatemala, Chile, Saudi Arabia and the United Arab Emirates. In February 2014, Apollo Global Management, LLC completed the acquisition of CEC Entertainment Inc.

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