Panera Bread (NASDAQ: PNRA) and Dunkin’ Brands Group (NASDAQ:DNKN) are both cyclical consumer goods & services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitabiliy, analyst recommendations, institutional ownership, risk, valuation, earnings and dividends.
Dunkin’ Brands Group pays an annual dividend of $1.29 per share and has a dividend yield of 2.3%. Panera Bread does not pay a dividend. Dunkin’ Brands Group pays out 56.3% of its earnings in the form of a dividend.
Risk & Volatility
Panera Bread has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500. Comparatively, Dunkin’ Brands Group has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500.
Earnings & Valuation
This table compares Panera Bread and Dunkin’ Brands Group’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Dunkin’ Brands Group||$832.00 million||6.03||$445.56 million||$2.29||23.99|
Dunkin’ Brands Group has higher revenue and earnings than Panera Bread. Dunkin’ Brands Group is trading at a lower price-to-earnings ratio than Panera Bread, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
96.7% of Panera Bread shares are held by institutional investors. Comparatively, 94.3% of Dunkin’ Brands Group shares are held by institutional investors. 7.0% of Panera Bread shares are held by insiders. Comparatively, 3.1% of Dunkin’ Brands Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This table compares Panera Bread and Dunkin’ Brands Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Dunkin’ Brands Group||25.48%||-141.72%||7.08%|
This is a summary of current ratings and price targets for Panera Bread and Dunkin’ Brands Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Dunkin’ Brands Group||3||8||7||0||2.22|
Panera Bread currently has a consensus price target of $278.33, indicating a potential downside of 11.62%. Dunkin’ Brands Group has a consensus price target of $56.24, indicating a potential upside of 2.38%. Given Dunkin’ Brands Group’s higher possible upside, analysts clearly believe Dunkin’ Brands Group is more favorable than Panera Bread.
Panera Bread beats Dunkin’ Brands Group on 8 of the 12 factors compared between the two stocks.
About Panera Bread
Panera Bread Company is a food service company. The Company is a national bakery-cafe concept. As of December 27, 2016, the Company operated 2,036 own and franchise-operated bakery-cafe locations in 46 states, the District of Columbia, and Ontario, Canada. It operates through three segments: Company bakery-cafe operations, franchise operations, and fresh dough and other product operations. The Company Bakery-Cafe Operations segment includes the operating activities of the bakery-cafes owned directly and indirectly by the Company. The Franchise Operations segment includes the operating activities of the franchise business unit, which licenses qualified operators to conduct business under the Panera Bread or Paradise Bakery & Cafe names. The Fresh Dough and Other Product Operations segment supplies fresh dough, produce, tuna, cream cheese, and indirectly supplies sweet goods items through a contract manufacturing arrangement, to the Company-owned and franchise-operated bakery-cafes.
About Dunkin’ Brands Group
Dunkin’ Brands Group, Inc. is a franchisor of quick service restaurants (QSRs) serving hot and cold coffee and baked goods, as well as hard serve ice cream. The Company franchises restaurants under its Dunkin’ Donuts and Baskin-Robbins brands. The Company operates through four segments: Dunkin’ Donuts-U.S., Dunkin’ Donuts International, Baskin-Robbins International and Baskin-Robbins-U.S. The Dunkin’ Donuts U.S. segment is the United States QSR concept, and markets donut and bagel categories for servings. The Baskin-Robbins-U.S. segment is engaged in serving hard-serve ice cream, and develops and sells a range of frozen ice cream treats, such as cones, cakes, sundaes and frozen beverages. The Company’s Dunkin’ Donuts International segment franchisees are responsible for sourcing their own supplies with its standards. As of December 31, 2016, Baskin-Robbins International segment had a manufacturing network, which consisted of 14 facilities.
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