Reviewing Dutch Bros (NYSE:BROS) and Cheesecake Factory (NASDAQ:CAKE)

Cheesecake Factory (NASDAQ:CAKE) and Dutch Bros (NYSE:BROS) are both mid-cap retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.

Profitability

This table compares Cheesecake Factory and Dutch Bros’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cheesecake Factory	4.33%	47.25%	6.01%
Dutch Bros	4.04%	8.91%	2.64%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Cheesecake Factory and Dutch Bros, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cheesecake Factory	4	5	10	0	2.32
Dutch Bros	0	3	16	4	3.04

Cheesecake Factory presently has a consensus price target of $59.18, suggesting a potential upside of 28.62%. Dutch Bros has a consensus price target of $76.72, suggesting a potential upside of 33.34%. Given Dutch Bros’ stronger consensus rating and higher probable upside, analysts clearly believe Dutch Bros is more favorable than Cheesecake Factory.

Valuation and Earnings

This table compares Cheesecake Factory and Dutch Bros”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cheesecake Factory	$3.71 billion	0.62	$156.78 million	$3.30	13.94
Dutch Bros	$1.54 billion	6.16	$35.26 million	$0.50	115.08

Cheesecake Factory has higher revenue and earnings than Dutch Bros. Cheesecake Factory is trading at a lower price-to-earnings ratio than Dutch Bros, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

94.5% of Cheesecake Factory shares are owned by institutional investors. Comparatively, 85.5% of Dutch Bros shares are owned by institutional investors. 8.4% of Cheesecake Factory shares are owned by company insiders. Comparatively, 42.4% of Dutch Bros 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.

Risk and Volatility

Cheesecake Factory has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Dutch Bros has a beta of 2.56, meaning that its stock price is 156% more volatile than the S&P 500.

Summary

Dutch Bros beats Cheesecake Factory on 8 of the 15 factors compared between the two stocks.

About Cheesecake Factory

The Cheesecake Factory Incorporated operates and licenses restaurants in the United States and Canada. The company operates bakeries that produce cheesecakes and other baked products for its restaurants, international licensees, third-party bakery customers, external foodservice operators, retailers, and distributors. It operates restaurants under the brands comprising The Cheesecake Factory, North Italia, Flower Child, Fox Restaurant Concepts. The Cheesecake Factory Incorporated was founded in 1972 and is headquartered in Calabasas, California.

About Dutch Bros

Dutch Bros Inc., together with its subsidiaries, operates and franchises drive-thru shops in the United States. The company operates through Company-Operated Shops and Franchising and Other segments. It serves through company-operated shops and online channels under Dutch Bros; Dutch Bros Coffee; Dutch Bros Rebel; Dutch Bros; and Blue Rebel brands. Dutch Bros Inc. was founded in 1992 and is headquartered in Grants Pass, Oregon.