Critical Review: Marston’s (OTCMKTS:MARZF) and Jack in the Box (NASDAQ:JACK)

Marston’s (OTCMKTS:MARZF) and Jack in the Box (NASDAQ:JACK) are both consumer cyclical companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.

Earnings & Valuation

This table compares Marston’s and Jack in the Box’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Marston’s	N/A	N/A	N/A	($0.09)	-4.16
Jack in the Box	$1.47 billion	0.92	$115.78 million	$7.39	9.06

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

Profitability

This table compares Marston’s and Jack in the Box’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Marston’s	N/A	N/A	N/A
Jack in the Box	8.99%	-18.39%	4.48%

Dividends

Marston’s pays an annual dividend of $0.07 per share and has a dividend yield of 17.6%. Jack in the Box pays an annual dividend of $1.76 per share and has a dividend yield of 2.6%. Marston’s pays out -73.0% of its earnings in the form of a dividend. Jack in the Box pays out 23.8% 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. Marston’s is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

42.8% of Marston’s shares are held by institutional investors. Comparatively, 99.8% of Jack in the Box shares are held by institutional investors. 1.3% of Jack in the Box shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings for Marston’s and Jack in the Box, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Marston’s	0	0	0	0	N/A
Jack in the Box	1	11	6	0	2.28

Jack in the Box has a consensus target price of $92.05, indicating a potential upside of 37.45%. Given Jack in the Box’s higher probable upside, analysts plainly believe Jack in the Box is more favorable than Marston’s.

Summary

Jack in the Box beats Marston’s on 9 of the 12 factors compared between the two stocks.

About Marston’s

Marston's PLC operates managed, franchised, and leased pubs in the United Kingdom. As of October 11, 2022, the company operated 1,468 pubs. It is also involved in the property management; telecommunications; and insurance businesses. The company was formerly known as The Wolverhampton & Dudley Breweries PLC and changed its name to Marston's PLC in January 2007. The company was founded in 1834 and is based in Wolverhampton, the United Kingdom.

About Jack in the Box

Jack in the Box Inc. operates and franchises Jack in the Box quick-service restaurants. The company was founded in 1951 and is headquartered in San Diego, California.