Head to Head Contrast: Super Group (SGHC) (NYSE:SGHC) and Wendy’s (NASDAQ:WEN)

Wendy’s (NASDAQ:WEN) and Super Group (SGHC) (NYSE:SGHC) are both consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.

Risk and Volatility

Wendy’s has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500. Comparatively, Super Group (SGHC) has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500.

Insider & Institutional Ownership

86.0% of Wendy’s shares are held by institutional investors. Comparatively, 5.1% of Super Group (SGHC) shares are held by institutional investors. 17.1% of Wendy’s shares are held by company insiders. Comparatively, 10.4% of Super Group (SGHC) shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company 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 4.5%. Super Group (SGHC) pays an annual dividend of $0.20 per share and has a dividend yield of 1.8%. Wendy’s pays out 42.4% of its earnings in the form of a dividend. Super Group (SGHC) pays out 27.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Analyst Recommendations

This is a summary of recent ratings and target prices for Wendy’s and Super Group (SGHC), as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wendy’s	5	12	2	0	1.84
Super Group (SGHC)	0	3	6	0	2.67

Wendy’s presently has a consensus price target of $7.52, indicating a potential upside of 20.83%. Super Group (SGHC) has a consensus price target of $18.00, indicating a potential upside of 65.96%. Given Super Group (SGHC)’s stronger consensus rating and higher possible upside, analysts plainly believe Super Group (SGHC) is more favorable than Wendy’s.

Profitability

This table compares Wendy’s and Super Group (SGHC)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wendy’s	5.72%	115.31%	2.70%
Super Group (SGHC)	15.22%	47.37%	29.05%

Earnings and Valuation

This table compares Wendy’s and Super Group (SGHC)”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wendy’s	$2.18 billion	0.54	$165.07 million	$0.66	9.42
Super Group (SGHC)	$2.23 billion	2.46	$217.00 million	$0.72	15.06

Super Group (SGHC) has higher revenue and earnings than Wendy’s. Wendy’s is trading at a lower price-to-earnings ratio than Super Group (SGHC), indicating that it is currently the more affordable of the two stocks.

Summary

Super Group (SGHC) beats Wendy’s on 12 of the 16 factors compared between the two stocks.

About Wendy’s

The Wendy’s Co. engages in operating, developing, and franchising a system of quick-service restaurants. It operates through the following segments: Wendy’s U.S., Wendy’s International, and Global Real Estate and Development. The Wendy’s U.S. segment includes the operation and franchising of Wendy’s restaurants in the U.S. The Wendy’s International segment is involved in the operation and franchising of Wendy’s restaurants in countries and territories other than the U.S. The Global Real Estate and Development segment focuses on real estate activity for owned sites and sites leased from third parties. The company was founded by R. David Thomas on November 15, 1969 and is headquartered in Dublin, OH.

About Super Group (SGHC)

Super Group (SGHC) Limited operates as an online sports betting and gaming operator. It offers Betway, an online sports betting brand; and Spin, a multi-brand online casino offering. Super Group (SGHC) Limited is based in Saint Peter Port, Guernsey.