Comparing Bally’s (NYSE:BALY) and Restaurant Brands International (NYSE:QSR)

Restaurant Brands International (NYSE:QSR) and Bally’s (NYSE:BALY) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Analyst Recommendations

This is a breakdown of current recommendations for Restaurant Brands International and Bally’s, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Restaurant Brands International	0	8	16	0	2.67
Bally’s	2	3	0	0	1.60

Restaurant Brands International presently has a consensus price target of $84.00, suggesting a potential upside of 9.92%. Bally’s has a consensus price target of $11.75, suggesting a potential upside of 29.33%. Given Bally’s’ higher probable upside, analysts plainly believe Bally’s is more favorable than Restaurant Brands International.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Restaurant Brands International	13.12%	33.43%	6.94%
Bally’s	-25.83%	-40.97%	-7.66%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Restaurant Brands International	$9.43 billion	2.83	$776.00 million	$3.72	20.54
Bally’s	$2.66 billion	0.17	-$701.10 million	($6.80)	-1.34

Restaurant Brands International has higher revenue and earnings than Bally’s. Bally’s 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.

Volatility & Risk

Restaurant Brands International has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500. Comparatively, Bally’s has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500.

Institutional and Insider Ownership

82.3% of Restaurant Brands International shares are owned by institutional investors. Comparatively, 70.4% of Bally’s shares are owned by institutional investors. 1.2% of Restaurant Brands International shares are owned by company insiders. Comparatively, 69.3% of Bally’s shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Restaurant Brands International beats Bally’s on 11 of the 14 factors compared between the two stocks.

About Restaurant Brands International

Restaurant Brands International Inc. operates as a quick-service restaurant company in Canada, the United States, and internationally. It operates through four segments: Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), and Firehouse Subs (FHS). The company owns and franchises TH chain of donut/coffee/tea restaurants that offer blend coffee, tea, and espresso-based hot and cold specialty drinks; and fresh baked goods, including donuts, Timbits, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps, soups, and other food products. It is also involved in owning and franchising BK, a fast-food hamburger restaurant chain, which offers flame-grilled hamburgers, chicken and other specialty sandwiches, French fries, soft drinks, and other food items; and PLK quick service restaurants that provide Louisiana-style fried chicken, chicken tenders, fried shrimp and other seafood, red beans and rice, and other regional items. In addition, the company owns and franchises FHS quick service restaurants that offer meats and cheese, chopped salads, chili and soups, signature and other sides, soft drinks, and local specialties. The company was founded in 1954 and is headquartered in Toronto, Canada.

About Bally’s

Bally’s Corp. is a global casino-entertainment company with a portfolio of casinos and resorts and online gaming businesses. It operates through the following segments: Casinos & Resorts, International Interactive, and North America Interactive. The Casinos & Resorts segment consists of the company’s casino and resort properties, a horse racetrack, and a golf course. The International Interactive segment includes the European and Asian operations of Gamesys, a business-to-consumer iCasino operator. The North America Interactive segment covers a portfolio of sports betting, iGaming, and free-to-play gaming brands such as Bally’s Interactive, SportCaller, and Live at the Bike, and the North American operations of Gamesys. The company was founded on March 1, 2004 and is headquartered in Providence, RI.