Analyzing El Pollo Loco (NASDAQ:LOCO) & Compass Group (OTCMKTS:CMPGY)

Compass Group (OTCMKTS:CMPGY) and El Pollo Loco (NASDAQ:LOCO) are both retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Volatility and Risk

Compass Group has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, El Pollo Loco has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.

Earnings and Valuation

This table compares Compass Group and El Pollo Loco”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Compass Group	$46.07 billion	1.18	$1.87 billion	N/A	N/A
El Pollo Loco	$473.01 million	0.69	$25.68 million	$0.88	12.33

Compass Group has higher revenue and earnings than El Pollo Loco.

Institutional & Insider Ownership

0.0% of Compass Group shares are owned by institutional investors. Comparatively, 81.3% of El Pollo Loco shares are owned by institutional investors. 0.0% of Compass Group shares are owned by insiders. Comparatively, 3.1% of El Pollo Loco shares are owned by 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.

Profitability

This table compares Compass Group and El Pollo Loco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Compass Group	N/A	N/A	N/A
El Pollo Loco	5.39%	10.15%	4.62%

Analyst Recommendations

This is a summary of current ratings and price targets for Compass Group and El Pollo Loco, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Group	0	0	2	2	3.50
El Pollo Loco	0	2	2	1	2.80

El Pollo Loco has a consensus price target of $15.75, suggesting a potential upside of 45.16%. Given El Pollo Loco’s higher probable upside, analysts clearly believe El Pollo Loco is more favorable than Compass Group.

Summary

El Pollo Loco beats Compass Group on 7 of the 12 factors compared between the two stocks.

About Compass Group

Compass Group PLC operates as a food and support services company in North America, Europe, and internationally. The company offers support services, such as cleaning in hospitals; reception services at corporate headquarters; managing remote camps; grounds and facilities services at schools and universities; and others. It serves business and industry; healthcare and senior living market; education; sports and leisure; and defense, offshore, and remote sectors. Compass Group PLC was founded in 1941 and is based in Chertsey, the United Kingdom.

About El Pollo Loco

El Pollo Loco Holdings, Inc., through its subsidiary, El Pollo Loco, Inc., develops, franchises, licenses, and operates quick-service restaurants under the El Pollo Loco name. It operates and franchises restaurants located in California, Nevada, Arizona, Texas, Colorado, Utah, and Louisiana. It also licenses its brand to restaurants in the Philippines. The company was formerly known as Chicken Acquisition Corp. and changed its name to El Pollo Loco Holdings, Inc. in April 2014. El Pollo Loco Holdings, Inc. was founded in 1975 and is headquartered in Costa Mesa, California.