Comparing Cracker Barrel Old Country Store (NASDAQ:CBRL) and Wendy’s (NASDAQ:WEN)

Cracker Barrel Old Country Store (NASDAQ:CBRL) and Wendy’s (NASDAQ:WEN) are both small-cap retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, risk, dividends and profitability.

Analyst Ratings

This is a breakdown of current ratings for Cracker Barrel Old Country Store and Wendy’s, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cracker Barrel Old Country Store	4	6	2	1	2.00
Wendy’s	5	16	4	0	1.96

Cracker Barrel Old Country Store presently has a consensus price target of $37.75, indicating a potential upside of 28.58%. Wendy’s has a consensus price target of $8.81, indicating a potential upside of 23.34%. Given Cracker Barrel Old Country Store’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Cracker Barrel Old Country Store is more favorable than Wendy’s.

Valuation & Earnings

This table compares Cracker Barrel Old Country Store and Wendy’s”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cracker Barrel Old Country Store	$3.48 billion	0.19	$46.38 million	($0.18)	-163.11
Wendy’s	$2.18 billion	0.62	$165.07 million	$0.85	8.40

Wendy’s has lower revenue, but higher earnings than Cracker Barrel Old Country Store. Cracker Barrel Old Country Store is trading at a lower price-to-earnings ratio than Wendy’s, indicating that it is currently the more affordable of the two stocks.

Dividends

Cracker Barrel Old Country Store pays an annual dividend of $1.00 per share and has a dividend yield of 3.4%. Wendy’s pays an annual dividend of $0.56 per share and has a dividend yield of 7.8%. Cracker Barrel Old Country Store pays out -555.6% of its earnings in the form of a dividend. Wendy’s pays out 65.9% 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.

Profitability

This table compares Cracker Barrel Old Country Store and Wendy’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cracker Barrel Old Country Store	-0.12%	4.25%	0.89%
Wendy’s	7.58%	145.93%	3.47%

Risk & Volatility

Cracker Barrel Old Country Store has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, Wendy’s has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500.

Insider and Institutional Ownership

96.0% of Cracker Barrel Old Country Store shares are owned by institutional investors. Comparatively, 86.0% of Wendy’s shares are owned by institutional investors. 1.4% of Cracker Barrel Old Country Store shares are owned by insiders. Comparatively, 17.1% of Wendy’s shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Wendy’s beats Cracker Barrel Old Country Store on 10 of the 17 factors compared between the two stocks.

About Cracker Barrel Old Country Store

Cracker Barrel Old Country Store, Inc. develops and operates the Cracker Barrel Old Country Store concept in the United States. Its Cracker Barrel stores consist of restaurants with a gift shop. The company's restaurants serve breakfast, lunch, and dinner daily, as well as dine-in, pick-up, and delivery services. Its gift shop offers various decorative and functional items, such as rocking chairs, seasonal gifts, apparel, toys, food, cookware, and various other gift items, as well as various candies, preserves, and other food items. The company was incorporated in 1969 and is headquartered in Lebanon, Tennessee.

About Wendy’s

The Wendy’s Co. engages in operating, developing, and franchising a system of quick-service restaurants. It operates through the following segments: Wendy’s U.S., Wendy’s International, and Global Real Estate and Development. The Wendy’s U.S. segment includes the operation and franchising of Wendy’s restaurants in the U.S. The Wendy’s International segment is involved in the operation and franchising of Wendy’s restaurants in countries and territories other than the U.S. The Global Real Estate and Development segment focuses on real estate activity for owned sites and sites leased from third parties. The company was founded by R. David Thomas on November 15, 1969 and is headquartered in Dublin, OH.