CAVA Group (NYSE:CAVA) and Restaurant Brands International (NYSE:QSR) Critical Contrast

Restaurant Brands International (NYSE:QSR) and CAVA Group (NYSE:CAVA) are both large-cap retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Restaurant Brands International	16.01%	28.25%	5.73%
CAVA Group	5.88%	9.10%	5.24%

Risk & Volatility

Restaurant Brands International has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, CAVA Group has a beta of 2.93, indicating that its stock price is 193% more volatile than the S&P 500.

Institutional and Insider Ownership

82.3% of Restaurant Brands International shares are held by institutional investors. Comparatively, 73.2% of CAVA Group shares are held by institutional investors. 1.4% of Restaurant Brands International shares are held by company insiders. Comparatively, 12.1% of CAVA Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Restaurant Brands International and CAVA Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Restaurant Brands International	$7.93 billion	2.65	$1.19 billion	$3.99	16.28
CAVA Group	$913.49 million	14.43	$13.28 million	$0.46	250.17

Restaurant Brands International has higher revenue and earnings than CAVA Group. Restaurant Brands International is trading at a lower price-to-earnings ratio than CAVA Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and price targets for Restaurant Brands International and CAVA Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Restaurant Brands International	1	8	16	0	2.60
CAVA Group	0	8	8	0	2.50

Restaurant Brands International presently has a consensus target price of $82.27, suggesting a potential upside of 26.68%. CAVA Group has a consensus target price of $143.80, suggesting a potential upside of 24.96%. Given Restaurant Brands International’s stronger consensus rating and higher probable upside, analysts clearly believe Restaurant Brands International is more favorable than CAVA Group.

Summary

Restaurant Brands International beats CAVA Group on 10 of the 14 factors compared between the two stocks.

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.

About CAVA Group

CAVA Group, Inc. owns and operates a chain of restaurants under the CAVA brand in the United States. The company also offers dips, spreads, and dressings through grocery stores. In addition, the company provides online and mobile ordering platforms. Cava Group, Inc. was founded in 2006 and is headquartered in Washington, the District of Columbia.