Head to Head Comparison: Domino’s Pizza (NASDAQ:DPZ) and El Pollo Loco (NASDAQ:LOCO)

Domino’s Pizza (NASDAQ:DPZ) and El Pollo Loco (NASDAQ:LOCO) are both retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Domino’s Pizza and El Pollo Loco, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Domino’s Pizza	2	11	14	1	2.50
El Pollo Loco	0	1	1	0	2.50

Domino’s Pizza currently has a consensus target price of $490.78, indicating a potential upside of 5.81%. El Pollo Loco has a consensus target price of $18.00, indicating a potential upside of 72.08%. Given El Pollo Loco’s higher probable upside, analysts clearly believe El Pollo Loco is more favorable than Domino’s Pizza.

Volatility and Risk

Domino’s Pizza has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, El Pollo Loco has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Domino’s Pizza	12.49%	-15.09%	33.17%
El Pollo Loco	5.15%	9.83%	4.38%

Earnings & Valuation

This table compares Domino’s Pizza and El Pollo Loco”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Domino’s Pizza	$4.71 billion	3.35	$584.17 million	$17.22	26.94
El Pollo Loco	$473.01 million	0.66	$25.68 million	$0.84	12.45

Domino’s Pizza has higher revenue and earnings than El Pollo Loco. El Pollo Loco is trading at a lower price-to-earnings ratio than Domino’s Pizza, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

94.6% of Domino’s Pizza shares are held by institutional investors. Comparatively, 81.3% of El Pollo Loco shares are held by institutional investors. 0.8% of Domino’s Pizza shares are held by insiders. Comparatively, 3.1% of El Pollo Loco shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Domino’s Pizza beats El Pollo Loco on 11 of the 14 factors compared between the two stocks.

About Domino’s Pizza

Domino’s Pizza, Inc., through its subsidiaries, operates as a pizza company in the United States and internationally. The company operates through three segments: U.S. Stores, International Franchise, and Supply Chain. It offers pizzas under the Domino’s brand name through company-owned and franchised stores. It also provides oven-baked sandwiches, pastas, boneless chicken and chicken wings, breads and dips, desserts, and soft drink products, as well as loaded tots and pepperoni stuffed cheesy breads. Domino’s Pizza, Inc. was founded in 1960 and is headquartered in Ann Arbor, Michigan.

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.