KFC vs El Pollo Loco Which Should You Buy?

Both KFC and El Pollo Loco are popular fast-food chains specializing in fried chicken, but their stocks tell different stories. KFC, owned by Yum! Brands, has shown steady growth and profitability over the years as part of a larger, diverse portfolio. On the other hand, El Pollo Loco, a smaller chain, has faced more volatility in its stock performance due to factors like competition and market saturation. Investors must carefully consider the strengths and weaknesses of each company before making investment decisions.

KFC or El Pollo Loco?

When comparing KFC and El Pollo Loco, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between KFC and El Pollo Loco.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. KFC has a dividend yield of 4.83%, while El Pollo Loco has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. KFC reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, El Pollo Loco reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with KFC P/E ratio at 9.87 and El Pollo Loco's P/E ratio at 15.11. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. KFC P/B ratio is 0.45 while El Pollo Loco's P/B ratio is 1.43.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, KFC has seen a 5-year revenue growth of 0.02%, while El Pollo Loco's is 0.21%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with KFC's ROE at 4.62% and El Pollo Loco's ROE at 9.53%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are ¥1243.00 for KFC and $12.38 for El Pollo Loco. Over the past year, KFC's prices ranged from ¥1176.00 to ¥1606.00, with a yearly change of 36.56%. El Pollo Loco's prices fluctuated between $8.17 and $14.25, with a yearly change of 74.42%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.