Comparing Marston’s (OTCMKTS:MARZF) & Papa Johns International (NASDAQ:PZZA)

Papa Johns International (NASDAQ:PZZA) and Marston’s (OTCMKTS:MARZF) are both retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.

Earnings and Valuation

This table compares Papa Johns International and Marston’s’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Papa Johns International	$2.12 billion	0.72	$82.10 million	$2.25	20.56
Marston’s	N/A	N/A	N/A	($0.09)	-4.35

Papa Johns International has higher revenue and earnings than Marston’s. Marston’s is trading at a lower price-to-earnings ratio than Papa Johns International, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

42.8% of Marston’s shares are owned by institutional investors. 8.9% of Papa Johns International shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Papa Johns International and Marston’s, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Papa Johns International	0	6	7	0	2.54
Marston’s	0	0	0	0	N/A

Papa Johns International currently has a consensus target price of $58.82, indicating a potential upside of 27.15%. Given Papa Johns International’s higher probable upside, equities analysts plainly believe Papa Johns International is more favorable than Marston’s.

Dividends

Papa Johns International pays an annual dividend of $1.84 per share and has a dividend yield of 4.0%. Marston’s pays an annual dividend of $0.07 per share and has a dividend yield of 16.8%. Papa Johns International pays out 81.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Marston’s pays out -73.0% of its earnings in the form of a dividend. Marston’s is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Papa Johns International and Marston’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Papa Johns International	3.25%	-19.85%	10.37%
Marston’s	N/A	N/A	N/A

Summary

Papa Johns International beats Marston’s on 8 of the 12 factors compared between the two stocks.

About Papa Johns International

Papa John’s International, Inc. operates and franchises pizza delivery and carryout restaurants under the Papa John’s trademark in the United States and internationally. The company operates through four segments: Domestic Company-Owned Restaurants, North America Commissaries, North America Franchising, and International Operations. It also operates dine-in and delivery restaurants under the Papa John’s trademark internationally. Papa John’s International, Inc. was founded in 1984 and is based in Louisville, Kentucky.

About Marston’s

Marston's PLC operates managed, franchised, tenanted, partnership, and leased pubs in the United Kingdom. It is also involved in the property management; telecommunications; and insurance businesses. The company was formerly known as The Wolverhampton & Dudley Breweries PLC and changed its name to Marston's PLC in January 2007. The company was founded in 1834 and is based in Wolverhampton, the United Kingdom.