Critical Survey: Restaurant Brands International (NYSE:QSR) vs. Krispy Kreme (NASDAQ:DNUT)

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

Institutional and Insider Ownership

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

Analyst Ratings

This is a summary of current ratings and target prices for Krispy Kreme and Restaurant Brands International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Krispy Kreme	3	1	2	0	1.83
Restaurant Brands International	0	8	15	0	2.65

Krispy Kreme presently has a consensus price target of $4.50, suggesting a potential upside of 44.00%. Restaurant Brands International has a consensus price target of $83.86, suggesting a potential upside of 14.26%. Given Krispy Kreme’s higher possible upside, analysts plainly believe Krispy Kreme is more favorable than Restaurant Brands International.

Risk and Volatility

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

Earnings & Valuation

This table compares Krispy Kreme and Restaurant Brands International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Krispy Kreme	$1.52 billion	0.35	-$515.77 million	($2.99)	-1.05
Restaurant Brands International	$9.43 billion	2.72	$776.00 million	$2.84	25.84

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.

Profitability

This table compares Krispy Kreme and Restaurant Brands International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Krispy Kreme	-33.36%	-4.34%	-1.15%
Restaurant Brands International	9.96%	32.80%	6.67%

Summary

Restaurant Brands International beats Krispy Kreme on 11 of the 14 factors compared between the two stocks.

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.

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.