Frontdoor (NASDAQ:FTDR) vs. Yelp (NYSE:YELP) Head-To-Head Survey

Frontdoor (NASDAQ:FTDR) and Yelp (NYSE:YELP) are both mid-cap consumer cyclical companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, dividends, institutional ownership, analyst recommendations and earnings.

Insider & Institutional Ownership

90.1% of Yelp shares are owned by institutional investors. 0.3% of Frontdoor shares are owned by company insiders. Comparatively, 7.4% of Yelp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Frontdoor and Yelp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Frontdoor	1	1	3	0	2.40
Yelp	1	4	1	0	2.00

Frontdoor presently has a consensus target price of $47.75, suggesting a potential upside of 3.02%. Yelp has a consensus target price of $39.00, suggesting a potential upside of 15.32%. Given Yelp’s higher possible upside, analysts clearly believe Yelp is more favorable than Frontdoor.

Earnings and Valuation

This table compares Frontdoor and Yelp’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Frontdoor	$1.81 billion	1.99	$171.00 million	$2.28	20.33
Yelp	$1.34 billion	1.71	$99.17 million	$1.57	21.54

Frontdoor has higher revenue and earnings than Yelp. Frontdoor is trading at a lower price-to-earnings ratio than Yelp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Frontdoor and Yelp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Frontdoor	11.38%	132.94%	19.73%
Yelp	10.01%	18.71%	13.78%

Volatility and Risk

Frontdoor has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500. Comparatively, Yelp has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500.

Summary

Frontdoor beats Yelp on 9 of the 14 factors compared between the two stocks.

About Frontdoor

Frontdoor, Inc. provides home warranties in the United States in the United States. Its customizable home warranties help customers protect and maintain their homes from costly and unplanned breakdowns of essential home systems and appliances. The company’s home warranty customers subscribe to an annual service plan agreement that covers the repair or replacement of principal components of approximately 20 home systems and appliances, including electrical, plumbing, water heaters, refrigerators, dishwashers, and ranges/ovens/cooktops, as well as electronics, pools, and spas and pumps; and heating, ventilation, and air conditioning systems. It also offers on-demand home services and a one-stop app experience for home repair and maintenance; and Streem technology, an app that empowers homeowners by connecting them in real time through video chat with qualified experts to diagnose and solve their problems. The company serves homeowners under the Frontdoor, American Home Shield, HSA, OneGuard, Landmark Home Warranty, Frontdoor logo, and Streem brands. The company was founded in 1971 and is headquartered in Memphis, Tennessee.

About Yelp

Yelp Inc. operates a platform that connects consumers with local businesses in the United States and internationally. The company's platform covers various categories, including restaurants, shopping, beauty and fitness, health, and other categories, as well as home, local, auto, professional, pets, events, real estate, and financial services. It provides free and paid advertising products to businesses, which include cost-per-click advertising and multi-location Ad products, as well as enables businesses to deliver targeted advertising to large and high-intent audience; and business listing page products. The company also offers other services comprising Yelp Guest Manager, a subscription-based suite of front-of-house management tools for restaurants, nightlife and certain other venues, which include online reservations, a waitlist management solution that allows consumers to check wait times and join waitlists remotely, as well as through hostless kiosks, and seating and server rotation management tools; Yelp Knowledge program that offers business owners local analytics and insights through access to its historical data and other proprietary content; and Yelp Fusion, which offers free access to various basic information through publicly available APIs, and paid access to content and data for consumer-facing enterprise use. In addition, it provides content licensing, as well as allows third-party data providers to update and manage business listing information on behalf of businesses. Further, the company offers its products directly through its sales force; indirectly through partners; and online through its website and business app, as well as non-advertising partner arrangements. It has partnership with Grubhub for providing consumers with a service to place food orders for pickup and delivery. The company was incorporated in 2004 and is based in San Francisco, California.