Head-To-Head Analysis: BJ’s Restaurants (NASDAQ:BJRI) versus Shake Shack (NYSE:SHAK)

Shake Shack (NYSE:SHAK) and BJ’s Restaurants (NASDAQ:BJRI) are both retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Risk & Volatility

Shake Shack has a beta of 1.67, suggesting that its stock price is 67% more volatile than the S&P 500. Comparatively, BJ’s Restaurants has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Shake Shack and BJ’s Restaurants, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shake Shack	1	15	7	1	2.33
BJ’s Restaurants	2	6	3	0	2.09

Shake Shack presently has a consensus price target of $119.10, suggesting a potential upside of 42.26%. BJ’s Restaurants has a consensus price target of $38.75, suggesting a potential downside of 5.99%. Given Shake Shack’s stronger consensus rating and higher probable upside, research analysts clearly believe Shake Shack is more favorable than BJ’s Restaurants.

Earnings & Valuation

This table compares Shake Shack and BJ’s Restaurants”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shake Shack	$1.25 billion	2.85	$10.21 million	$1.02	82.07
BJ’s Restaurants	$1.36 billion	0.64	$16.69 million	$1.34	30.76

BJ’s Restaurants has higher revenue and earnings than Shake Shack. BJ’s Restaurants is trading at a lower price-to-earnings ratio than Shake Shack, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

86.1% of Shake Shack shares are owned by institutional investors. Comparatively, 100.0% of BJ’s Restaurants shares are owned by institutional investors. 8.5% of Shake Shack shares are owned by company insiders. Comparatively, 4.3% of BJ’s Restaurants 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.

Profitability

This table compares Shake Shack and BJ’s Restaurants’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shake Shack	3.10%	10.43%	3.04%
BJ’s Restaurants	2.23%	12.92%	4.67%

Summary

Shake Shack beats BJ’s Restaurants on 9 of the 15 factors compared between the two stocks.

About Shake Shack

Shake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. Its Shacks offers hamburgers, chicken, hot dogs, crinkle cut fries, shakes, frozen custard, beer, wine, and other products. The company was founded in 2001 and is headquartered in New York, New York.

About BJ’s Restaurants

BJ’s Restaurants, Inc. owns and operates casual dining restaurants in the United States. Its restaurants offer pizzas, craft and other beers, appetizers, entrées, pastas, sandwiches, specialty salads, and desserts under brand name Pizookie. The company was formerly known as Chicago Pizza & Brewery, Inc. and changed its name to BJ’s Restaurants, Inc. in August 2004. BJ’s Restaurants, Inc. was founded in 1978 and is based in Huntington Beach, California.