Chuy's (NASDAQ: CHUY) and Starbucks (NASDAQ:SBUX) are both cyclical consumer goods & services companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.
This is a breakdown of recent ratings and price targets for Chuy's and Starbucks, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Chuy's presently has a consensus price target of $26.75, suggesting a potential upside of 3.88%. Starbucks has a consensus price target of $64.75, suggesting a potential upside of 15.69%. Given Starbucks’ stronger consensus rating and higher possible upside, analysts clearly believe Starbucks is more favorable than Chuy's.
Volatility and Risk
Chuy's has a beta of -0.28, indicating that its share price is 128% less volatile than the S&P 500. Comparatively, Starbucks has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.
Earnings and Valuation
This table compares Chuy's and Starbucks’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Chuy's||$330.61 million||1.32||$17.24 million||$0.91||28.30|
|Starbucks||$22.39 billion||3.51||$2.88 billion||$2.98||18.78|
Starbucks has higher revenue and earnings than Chuy's. Starbucks is trading at a lower price-to-earnings ratio than Chuy's, indicating that it is currently the more affordable of the two stocks.
Starbucks pays an annual dividend of $1.20 per share and has a dividend yield of 2.1%. Chuy's does not pay a dividend. Starbucks pays out 40.3% of its earnings in the form of a dividend.
This table compares Chuy's and Starbucks’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
97.9% of Chuy's shares are owned by institutional investors. Comparatively, 71.9% of Starbucks shares are owned by institutional investors. 3.3% of Chuy's shares are owned by company insiders. Comparatively, 3.5% of Starbucks shares are owned by company 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.
Starbucks beats Chuy's on 13 of the 16 factors compared between the two stocks.
Chuy’s Holdings, Inc. operates Chuy’s, a restaurant concept offering a distinct menu of authentic, freshly prepared Mexican and Tex-Mex inspired food. As of December 25, 2016, the Company operated 80 Chuy’s restaurants across 16 states. The Company offers the same menu during lunch and dinner, which includes enchiladas, fajitas, tacos, burritos, combination platters and daily specials, complemented by a range of appetizers, soups and salads. Each of the Company’s restaurants offers a range of homemade sauces, including the signature Hatch green chile and creamy jalapeno sauces. The Company also offers a full-service bar in all of its restaurants providing its customers a range of beverage offerings, featuring a selection of specialty cocktails including its signature on-the-rocks margaritas made with fresh, hand-squeezed lime juice, and the Texas Martini, a made-to-order, hand-shaken cocktail served with jalapeno-stuffed olives.
Starbucks Corporation (Starbucks) is a roaster, marketer and retailer of coffee. As of October 2, 2016, the Company operated in 75 countries. The Company operates through four segments: Americas, which is inclusive of the United States, Canada, and Latin America; China/Asia Pacific (CAP); Europe, Middle East, and Africa (EMEA), and Channel Development. The Company’s Americas, CAP, and EMEA segments include both company-operated and licensed stores. Its Channel Development segment includes roasted whole bean and ground coffees, Tazo teas, Starbucks- and Tazo-branded single-serve products, a range of ready-to-drink beverages, such as Frappuccino, Starbucks Doubleshot and Starbucks Refreshers beverages and other branded products sold across the world through channels, such as grocery stores, warehouse clubs, specialty retailers, convenience stores and the United States foodservice accounts.
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