BJ’s Restaurants (NASDAQ:BJRI) vs. Churchill Downs (NASDAQ:CHDN) Head to Head Review

BJ’s Restaurants (NASDAQ:BJRI) and Churchill Downs (NASDAQ:CHDN) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Insider and Institutional Ownership

99.9% of BJ’s Restaurants shares are held by institutional investors. Comparatively, 82.6% of Churchill Downs shares are held by institutional investors. 2.4% of BJ’s Restaurants shares are held by company insiders. Comparatively, 5.9% of Churchill Downs shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for BJ’s Restaurants and Churchill Downs, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BJ’s Restaurants	1	4	4	0	2.33
Churchill Downs	0	1	11	0	2.92

BJ’s Restaurants currently has a consensus target price of $62.00, indicating a potential downside of 0.85%. Churchill Downs has a consensus target price of $126.70, indicating a potential upside of 33.61%. Given Churchill Downs’ stronger consensus rating and higher possible upside, analysts clearly believe Churchill Downs is more favorable than BJ’s Restaurants.

Earnings and Valuation

This table compares BJ’s Restaurants and Churchill Downs”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BJ’s Restaurants	$1.43 billion	0.93	$48.81 million	$1.87	33.44
Churchill Downs	$3.00 billion	2.20	$383.00 million	$6.44	14.73

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

Dividends

BJ’s Restaurants pays an annual dividend of $0.52 per share and has a dividend yield of 0.8%. Churchill Downs pays an annual dividend of $0.43 per share and has a dividend yield of 0.5%. BJ’s Restaurants pays out 27.8% of its earnings in the form of a dividend. Churchill Downs pays out 6.7% 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. Churchill Downs has raised its dividend for 14 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
BJ’s Restaurants	2.86%	12.93%	4.79%
Churchill Downs	15.15%	39.90%	6.43%

Risk & Volatility

BJ’s Restaurants has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500. Comparatively, Churchill Downs has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.

Summary

Churchill Downs beats BJ’s Restaurants on 13 of the 17 factors compared between the two stocks.

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.

About Churchill Downs

Churchill Downs Incorporated operates as a racing, online wagering, and gaming entertainment company in the United States. It operates through three segments: Live and Historical Racing, TwinSpires, and Gaming. The company operates pari-mutuel gaming entertainment venues; TwinSpires, an online wagering platform for horse racing, sports, and iGaming; retail sports books; casino gaming; and Terre Haute Casino Resort. It also offers streaming video of live horse races, replays, and an assortment of racing and handicapping information; and provides the Bloodstock Research Information Services platform for horse racing statistical data. In addition, the company manufactures and operates pari-mutuel wagering systems for racetracks, off-track betting facilities, and other pari-mutuel wagering businesses. Churchill Downs Incorporated was founded in 1875 and is headquartered in Louisville, Kentucky.