Reviewing Kona Grill (KONA) & Yum! Brands (YUM)

Kona Grill (NASDAQ: KONA) and Yum! Brands (NYSE:YUM) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, risk, institutional ownership, valuation, dividends and profitability.

Profitability

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This table compares Kona Grill and Yum! Brands’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kona Grill	-12.80%	-94.61%	-11.63%
Yum! Brands	25.60%	-17.70%	21.14%

Dividends

Yum! Brands pays an annual dividend of $1.44 per share and has a dividend yield of 1.8%. Kona Grill does not pay a dividend. Yum! Brands pays out 48.6% of its earnings in the form of a dividend.

Risk & Volatility

Kona Grill has a beta of 0.26, suggesting that its stock price is 74% less volatile than the S&P 500. Comparatively, Yum! Brands has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500.

Institutional & Insider Ownership

13.5% of Kona Grill shares are owned by institutional investors. Comparatively, 74.1% of Yum! Brands shares are owned by institutional investors. 31.5% of Kona Grill shares are owned by company insiders. Comparatively, 0.6% of Yum! Brands shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Kona Grill and Yum! Brands’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kona Grill	$179.08 million	0.19	-$23.43 million	N/A	N/A
Yum! Brands	$5.88 billion	4.28	$1.34 billion	$2.96	26.30

Yum! Brands has higher revenue and earnings than Kona Grill.

Analyst Ratings

This is a breakdown of recent recommendations for Kona Grill and Yum! Brands, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kona Grill	0	2	1	0	2.33
Yum! Brands	0	10	13	0	2.57

Kona Grill currently has a consensus target price of $3.75, indicating a potential upside of 50.00%. Yum! Brands has a consensus target price of $85.68, indicating a potential upside of 10.08%. Given Kona Grill’s higher probable upside, equities analysts clearly believe Kona Grill is more favorable than Yum! Brands.

Summary

Yum! Brands beats Kona Grill on 11 of the 14 factors compared between the two stocks.

Kona Grill Company Profile

Kona Grill, Inc. owns and operates upscale casual restaurants under the Kona Grill brand name. As of December 31, 2017, it owned and operated 46 restaurants in 23 states of the United States and Puerto Rico; and 3 franchised restaurants in Mexico, the United Arab Emirates, and Canada. The company is based in Scottsdale, Arizona.

Yum! Brands Company Profile

YUM! Brands, Inc., together with its subsidiaries, develops, operates, and franchises quick service restaurants worldwide. It operates in three segments: the KFC Division, the Pizza Hut Division, and the Taco Bell Division. The company operates restaurants under the KFC, Pizza Hut, and Taco Bell brands, which specialize in chicken, pizza, and Mexican-style food categories. As of December 31, 2017, it had 21,487 KFC units; 16,748 Pizza Hut units; and 6,849 Taco Bell units. The company was formerly known as TRICON Global Restaurants, Inc. and changed its name to YUM! Brands, Inc. in May 2002. YUM! Brands, Inc. was founded in 1997 and is headquartered in Louisville, Kentucky.