Head-To-Head Review: Starbucks (NASDAQ:SBUX) & CAVA Group (NYSE:CAVA)

Starbucks (NASDAQ:SBUX) and CAVA Group (NYSE:CAVA) are both retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Institutional and Insider Ownership

72.3% of Starbucks shares are held by institutional investors. Comparatively, 73.2% of CAVA Group shares are held by institutional investors. 0.1% of Starbucks shares are held by company insiders. Comparatively, 6.8% of CAVA Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Starbucks and CAVA Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Starbucks	2	10	14	1	2.52
CAVA Group	0	8	11	1	2.65

Starbucks currently has a consensus price target of $102.76, suggesting a potential upside of 20.38%. CAVA Group has a consensus price target of $95.50, suggesting a potential upside of 51.15%. Given CAVA Group’s stronger consensus rating and higher possible upside, analysts plainly believe CAVA Group is more favorable than Starbucks.

Risk and Volatility

Starbucks has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, CAVA Group has a beta of 2.5, indicating that its stock price is 150% more volatile than the S&P 500.

Valuation and Earnings

This table compares Starbucks 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
Starbucks	$36.18 billion	2.68	$3.76 billion	$2.32	36.79
CAVA Group	$1.08 billion	6.76	$130.32 million	$1.19	53.09

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Starbucks	7.18%	-36.23%	8.51%
CAVA Group	12.98%	9.83%	5.75%

Summary

CAVA Group beats Starbucks on 9 of the 14 factors compared between the two stocks.

About Starbucks

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of coffee worldwide. The company operates through three segments: North America, International, and Channel Development. Its stores offer coffee and tea beverages, roasted whole beans and ground coffees, single serve products, and ready-to-drink beverages; and various food products, such as pastries, breakfast sandwiches, and lunch items. The company also licenses its trademarks through licensed stores, and grocery and foodservice accounts. The company offers its products under the Starbucks Coffee, Teavana, Seattle’s Best Coffee, Ethos, Starbucks Reserve, and Princi brands. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.

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.