Portillo’s (NASDAQ:PTLO) versus Yum China (NYSE:YUMC) Head-To-Head Review

Yum China (NYSE:YUMC) and Portillo’s (NASDAQ:PTLO) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, risk, analyst recommendations, dividends, institutional ownership and profitability.

Profitability

This table compares Yum China and Portillo’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Yum China	7.87%	14.65%	8.48%
Portillo’s	2.64%	3.93%	1.24%

Risk and Volatility

Yum China has a beta of 0.11, meaning that its stock price is 89% less volatile than the S&P 500. Comparatively, Portillo’s has a beta of 1.75, meaning that its stock price is 75% more volatile than the S&P 500.

Valuation and Earnings

This table compares Yum China and Portillo’s”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Yum China	$11.80 billion	1.48	$929.00 million	$2.51	19.73
Portillo’s	$732.07 million	0.53	$19.34 million	$0.27	19.19

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

Analyst Ratings

This is a breakdown of recent ratings for Yum China and Portillo’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Yum China	0	1	3	0	2.75
Portillo’s	1	9	3	0	2.15

Yum China currently has a consensus target price of $59.05, indicating a potential upside of 19.22%. Portillo’s has a consensus target price of $7.50, indicating a potential upside of 44.79%. Given Portillo’s’ higher probable upside, analysts plainly believe Portillo’s is more favorable than Yum China.

Insider and Institutional Ownership

85.6% of Yum China shares are held by institutional investors. Comparatively, 98.3% of Portillo’s shares are held by institutional investors. 0.4% of Yum China shares are held by insiders. Comparatively, 6.1% of Portillo’s shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Yum China beats Portillo’s on 9 of the 13 factors compared between the two stocks.

About Yum China

Yum China Holdings, Inc. owns, operates, and franchises restaurants in the People's Republic of China. The company operates through KFC, Pizza Hut, and All Other segments. It operates restaurants under the KFC, Pizza Hut, Taco Bell, Lavazza, Little Sheep, and Huang Ji Huang concepts. The company also operates V-Gold Mall, a mobile e-commerce platform to sell products; and offers online food deliver services. Yum China Holdings, Inc. was founded in 1987 and is headquartered in Shanghai, the People's Republic of China.

About Portillo’s

Portillo’s Inc. owns and operates fast casual restaurants in the United States. The company offers Chicago-style hot dogs and sausages, Italian beef sandwiches, char-grilled burgers, chopped salads, crinkle-cut French fries, homemade chocolate cakes, and chocolate cake shake. It offers its products through its website, application, and certain third-party platforms. Portillo’s Inc. was founded in 1963 and is based in Oak Brook, Illinois.