Analyzing Krispy Kreme (NASDAQ:DNUT) and Restaurant Brands International (NYSE:QSR)

Restaurant Brands International (NYSE:QSR) and Krispy Kreme (NASDAQ:DNUT) are both consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, dividends, earnings and risk.

Profitability

This table compares Restaurant Brands International and Krispy Kreme’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%
Krispy Kreme	-6.16%	-1.17%	-0.31%

Analyst Ratings

This is a summary of recent recommendations and price targets for Restaurant Brands International and Krispy Kreme, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Restaurant Brands International	0	8	16	0	2.67
Krispy Kreme	4	0	2	0	1.67

Restaurant Brands International currently has a consensus target price of $83.70, suggesting a potential upside of 9.42%. Krispy Kreme has a consensus target price of $4.33, suggesting a potential upside of 30.72%. Given Krispy Kreme’s higher probable upside, analysts clearly believe Krispy Kreme is more favorable than Restaurant Brands International.

Insider and Institutional Ownership

82.3% of Restaurant Brands International shares are held by institutional investors. Comparatively, 81.7% of Krispy Kreme shares are held by institutional investors. 1.2% of Restaurant Brands International shares are held by company insiders. Comparatively, 1.6% of Krispy Kreme shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Restaurant Brands International has a beta of 0.5, indicating that its share price is 50% less volatile than the S&P 500. Comparatively, Krispy Kreme has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500.

Earnings and Valuation

This table compares Restaurant Brands International and Krispy Kreme”s revenue, earnings per share 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	20.56
Krispy Kreme	$1.52 billion	0.38	-$515.77 million	($0.56)	-5.92

Restaurant Brands International has higher revenue and earnings than Krispy Kreme. Krispy Kreme 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.

Summary

Restaurant Brands International beats Krispy Kreme 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 Krispy Kreme

Krispy Kreme, Inc., together with its subsidiaries, produces doughnuts in the United States, the United Kingdom, Ireland, Australia, New Zealand, Mexico, Canada, Japan, and internationally. The company operates through three segments: U.S., International, and Market Development. The company offers doughnut experiences through hot light theater and fresh shops, delivered fresh daily branded cabinets and merchandising units within grocery and convenience stores, quick service restaurants, club memberships, drug stores, and ecommerce, as well as through its branded sweet treat line comprising Krispy Kreme branded sweet treats. It also provides cookies under the Insomnia Cookies brand, cookie cakes, ice cream, cookie-wiches, and brownies; and operates Krispy Kreme company-owned shops and franchise shops. The company was formerly known as Krispy Kreme Doughnuts, Inc. and changed its name to Krispy Kreme, Inc. in May 2021. Krispy Kreme, Inc. was founded in 1937 and is based in Charlotte, North Carolina.