Dave & Buster’s Entertainment (NASDAQ:PLAY) and Starbucks (NASDAQ:SBUX) Head to Head Survey

Starbucks (NASDAQ:SBUX) and Dave & Buster’s Entertainment (NASDAQ:PLAY) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, analyst recommendations, valuation, institutional ownership, profitability and earnings.

Analyst Recommendations

This is a breakdown of recent ratings for Starbucks and Dave & Buster’s Entertainment, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Starbucks	2	11	20	0	2.55
Dave & Buster’s Entertainment	2	3	3	0	2.13

Starbucks presently has a consensus price target of $107.48, suggesting a potential upside of 0.83%. Dave & Buster’s Entertainment has a consensus price target of $21.83, suggesting a potential upside of 109.94%. Given Dave & Buster’s Entertainment’s higher probable upside, analysts clearly believe Dave & Buster’s Entertainment is more favorable than Starbucks.

Volatility and Risk

Starbucks has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, Dave & Buster’s Entertainment has a beta of 1.78, meaning that its stock price is 78% more volatile than the S&P 500.

Institutional & Insider Ownership

72.3% of Starbucks shares are owned by institutional investors. Comparatively, 91.5% of Dave & Buster’s Entertainment shares are owned by institutional investors. 0.0% of Starbucks shares are owned by insiders. Comparatively, 1.7% of Dave & Buster’s Entertainment shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Starbucks and Dave & Buster’s Entertainment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Starbucks	3.89%	-29.24%	7.42%
Dave & Buster’s Entertainment	-2.32%	-7.93%	-0.26%

Earnings and Valuation

This table compares Starbucks and Dave & Buster’s Entertainment”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Starbucks	$37.18 billion	3.27	$1.86 billion	$1.32	80.76
Dave & Buster’s Entertainment	$2.10 billion	0.17	-$48.70 million	($1.43)	-7.27

Starbucks has higher revenue and earnings than Dave & Buster’s Entertainment. Dave & Buster’s Entertainment is trading at a lower price-to-earnings ratio than Starbucks, indicating that it is currently the more affordable of the two stocks.

Summary

Starbucks beats Dave & Buster’s Entertainment 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 Dave & Buster’s Entertainment

Dave & Buster's Entertainment, Inc. owns and operates entertainment and dining venues for adults and families. Its venues offer a menu of entrees and appetizers, as well as a selection of non-alcoholic and alcoholic beverages; and an assortment of entertainment attractions centered on playing games and watching live sports, and other televised events. The company operates its venues under the Dave & Buster's name. As of April 02, 2019, it owned and operated 125 venues in 39 states, Puerto Rico, and Canada. The company was founded in 1982 and is headquartered in Dallas, Texas.