Analyzing Trip.com Group (NASDAQ:TCOM) and Wendy’s (NASDAQ:WEN)

Trip.com Group (NASDAQ:TCOM) and Wendy’s (NASDAQ:WEN) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, earnings, valuation and dividends.

Earnings and Valuation

This table compares Trip.com Group and Wendy’s”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trip.com Group	$64.79 billion	0.39	$4.77 billion	$6.39	6.11
Wendy’s	$2.18 billion	0.67	$165.07 million	$0.66	11.56

Trip.com Group has higher revenue and earnings than Wendy’s. Trip.com Group is trading at a lower price-to-earnings ratio than Wendy’s, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and recommmendations for Trip.com Group and Wendy’s, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trip.com Group	1	4	9	0	2.57
Wendy’s	6	13	2	0	1.81

Trip.com Group presently has a consensus price target of $62.45, suggesting a potential upside of 60.06%. Wendy’s has a consensus price target of $7.78, suggesting a potential upside of 1.92%. Given Trip.com Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe Trip.com Group is more favorable than Wendy’s.

Profitability

This table compares Trip.com Group and Wendy’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trip.com Group	48.26%	17.57%	10.97%
Wendy’s	5.72%	115.31%	2.70%

Institutional and Insider Ownership

35.4% of Trip.com Group shares are owned by institutional investors. Comparatively, 86.0% of Wendy’s shares are owned by institutional investors. 23.0% of Trip.com Group shares are owned by company insiders. Comparatively, 17.1% of Wendy’s shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Trip.com Group pays an annual dividend of $0.28 per share and has a dividend yield of 0.7%. Wendy’s pays an annual dividend of $0.28 per share and has a dividend yield of 3.7%. Trip.com Group pays out 4.4% of its earnings in the form of a dividend. Wendy’s pays out 42.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Volatility & Risk

Trip.com Group has a beta of -0.05, suggesting that its share price is 105% less volatile than the S&P 500. Comparatively, Wendy’s has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500.

Summary

Trip.com Group beats Wendy’s on 10 of the 16 factors compared between the two stocks.

About Trip.com Group

Trip.com Group Limited, through its subsidiaries, operates as a travel service provider for accommodation reservation, transportation ticketing, packaged tours and in-destination, corporate travel management, and other travel-related services in China and internationally. The company acts as an agent for hotel-related transactions and selling air tickets, as well as provides train, long-distance bus, and ferry tickets; travel insurance products, such as flight delay, air accident, and baggage loss coverage; and air-ticket delivery, online check-in and seat selection, express security screening, real-time flight status tracker, and airport VIP lounge services. It also provides independent leisure travelers bundled packaged-tour products comprising group, semi-group, and customized and packaged tours with various transportation arrangements, including air, cruise, bus, and car rental services. In addition, the company offers integrated transportation and accommodation services; destination transportation and ticket, activity, insurance, visa, and tour guide services; user support, supplier management, and customer relationship management services; and in-destination products and services. Further, It provides its corporate clients with business visit, incentive trip, meeting and conference, travel data collection and analysis, and industry benchmarking solutions; and Corporate Travel Management System, an online platform that integrates information management, online booking and authorization, online inquiry, and travel reporting systems. Additionally, the company offers online advertising and financial services, such as marketing planning and travel media services. It operates under the Ctrip, Qunar, Trip.com, and Skyscanner brands. The company was formerly known as Ctrip.com International, Ltd. and changed its name to Trip.com Group Limited in October 2019. Trip.com Group Limited was founded in 1999 and is based in Singapore.

About Wendy’s

The Wendy’s Co. engages in operating, developing, and franchising a system of quick-service restaurants. It operates through the following segments: Wendy’s U.S., Wendy’s International, and Global Real Estate and Development. The Wendy’s U.S. segment includes the operation and franchising of Wendy’s restaurants in the U.S. The Wendy’s International segment is involved in the operation and franchising of Wendy’s restaurants in countries and territories other than the U.S. The Global Real Estate and Development segment focuses on real estate activity for owned sites and sites leased from third parties. The company was founded by R. David Thomas on November 15, 1969 and is headquartered in Dublin, OH.