Head to Head Analysis: Good Times Restaurants (GTIM) and Restaurant Brands International (QSR)

Good Times Restaurants (NASDAQ: GTIM) and Restaurant Brands International (NYSE:QSR) are both retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.

Dividends

Restaurant Brands International pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. Good Times Restaurants does not pay a dividend. Restaurant Brands International pays out 55.2% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Good Times Restaurants and Restaurant Brands International’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Good Times Restaurants $64.44 million 0.52 -$1.32 million ($0.14) -19.28
Restaurant Brands International $4.15 billion 3.72 $615.60 million $1.45 44.79

Restaurant Brands International has higher revenue and earnings than Good Times Restaurants. Good Times Restaurants 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 Good Times Restaurants and Restaurant Brands International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Good Times Restaurants -2.25% -4.44% -3.35%
Restaurant Brands International 12.40% 23.53% 4.12%

Risk & Volatility

Good Times Restaurants has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, Restaurant Brands International has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500.

Insider & Institutional Ownership

32.7% of Good Times Restaurants shares are held by institutional investors. Comparatively, 75.7% of Restaurant Brands International shares are held by institutional investors. 8.4% of Good Times Restaurants shares are held by insiders. Comparatively, 3.1% of Restaurant Brands International shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Good Times Restaurants and Restaurant Brands International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Good Times Restaurants 0 0 1 0 3.00
Restaurant Brands International 0 4 12 0 2.75

Good Times Restaurants presently has a consensus target price of $6.00, indicating a potential upside of 122.22%. Restaurant Brands International has a consensus target price of $69.21, indicating a potential upside of 6.58%. Given Good Times Restaurants’ stronger consensus rating and higher probable upside, analysts clearly believe Good Times Restaurants is more favorable than Restaurant Brands International.

Summary

Restaurant Brands International beats Good Times Restaurants on 11 of the 15 factors compared between the two stocks.

Good Times Restaurants Company Profile

Good Times Restaurants Inc. operates and franchises Good Times Burgers & Frozen Custard (Good Times) restaurants and Bad Daddy’s Burger Bar concept (Bad Daddy’s). The Company operates through two segments: Good Times Burgers and Frozen Custard restaurants, and Bad Daddy’s Burger Bar restaurants. Good Times is a quick service restaurant concept. The menu of a Good Times restaurant includes hamburgers, cheeseburgers, chicken sandwiches, French fries, onion rings, soft drinks and frozen custard products. Its breakfast menu includes breakfast burritos, orange juice and coffee. Bad Daddy’s operates in the burger casual dining sector and is chef driven, full service, full bar concept. Its menu consists of burgers, salads, sandwiches and appetizers. Its bar focuses on local, craft microbrew beers and specialty cocktails. The Company operates through its subsidiaries, Good Times Drive Thru, Inc., BD of Colorado, LLC, Bad Daddy’s Franchise Development, LLC and Bad Daddy’s International, LLC.

Restaurant Brands International Company Profile

Restaurant Brands International Inc. is a quick service restaurant (QSR) company. The Company had over 20,000 restaurants in more than 100 countries and the United States territories, as of December 31, 2016. It operates through two segments: Tim Hortons (TH) and Burger King (BK). Tim Hortons restaurants are quick service restaurants with a menu that includes blend coffee, tea, espresso-based hot and cold specialty drinks, baked goods, including donuts, Timbits, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps and soups, among others. Burger King restaurants are quick service restaurants that feature flame-grilled hamburgers, chicken and other specialty sandwiches, French fries, soft drinks and other food items. The Company operates coffee roasting facilities in Hamilton, Ontario and Rochester, New York. The Company sells its raw materials and supplies, including coffee, sugar, paper goods and other restaurant supplies to Tim Hortons restaurants.

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