Bravo Brio Restaurant Group (NASDAQ: BBRG) and Choice Hotels International (NYSE:CHH) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, profitabiliy, analyst recommendations and institutional ownership.

Profitability

This table compares Bravo Brio Restaurant Group and Choice Hotels International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bravo Brio Restaurant Group -18.72% 14.92% 1.16%
Choice Hotels International 16.05% -45.12% 17.22%

Earnings & Valuation

This table compares Bravo Brio Restaurant Group and Choice Hotels International’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Bravo Brio Restaurant Group $408.17 million 0.17 $19.65 million ($5.16) -0.90
Choice Hotels International $915.42 million 4.13 $272.73 million $2.59 26.02

Choice Hotels International has higher revenue and earnings than Bravo Brio Restaurant Group. Bravo Brio Restaurant Group is trading at a lower price-to-earnings ratio than Choice Hotels International, indicating that it is currently the more affordable of the two stocks.

Dividends

Choice Hotels International pays an annual dividend of $0.86 per share and has a dividend yield of 1.3%. Bravo Brio Restaurant Group does not pay a dividend. Choice Hotels International pays out 33.2% of its earnings in the form of a dividend. Choice Hotels International has increased its dividend for 3 consecutive years.

Volatility & Risk

Bravo Brio Restaurant Group has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, Choice Hotels International has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Bravo Brio Restaurant Group and Choice Hotels International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bravo Brio Restaurant Group 0 2 0 0 2.00
Choice Hotels International 1 5 2 0 2.13

Bravo Brio Restaurant Group presently has a consensus price target of $7.00, indicating a potential upside of 50.54%. Choice Hotels International has a consensus price target of $58.75, indicating a potential downside of 12.83%. Given Bravo Brio Restaurant Group’s higher possible upside, analysts clearly believe Bravo Brio Restaurant Group is more favorable than Choice Hotels International.

Insider and Institutional Ownership

58.7% of Bravo Brio Restaurant Group shares are owned by institutional investors. Comparatively, 49.8% of Choice Hotels International shares are owned by institutional investors. 7.5% of Bravo Brio Restaurant Group shares are owned by company insiders. Comparatively, 22.0% of Choice Hotels International shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Choice Hotels International beats Bravo Brio Restaurant Group on 12 of the 16 factors compared between the two stocks.

About Bravo Brio Restaurant Group

Bravo Brio Restaurant Group, Inc. is the owner and operator of approximately two Italian restaurant brands, including BRAVO! Cucina Italiana (BRAVO!) and BRIO Tuscan Grille (BRIO). The Company operates approximately 120 restaurants in over 30 states. Additionally, approximately one BRIO restaurant is operated under a franchise agreement. It has over 110 operating locations, owns approximately four locations, of which over 100 are located adjacent to or in lifestyle centers and shopping malls, and over 10 are free-standing units. Its reward programs, called MyBRAVO Rewards and MyBRIO Rewards, are designed to reward guests for their continuous dining at its restaurants. Its guests can download a MyBRAVO/MyBRIO! Rewards mobile application, register their cards at BRAVO! and BRIO locations or online at www.myBRAVOReward.com or www.myBRIOReward.com. It also operates approximately one full-service American-French bistro restaurant in Columbus, Ohio under the brand Bon Vie.

About Choice Hotels International

Choice Hotels International, Inc. is a hotel franchisor. The Company’s segments include Hotel Franchising, SkyTouch Technology and Corporate & Other. It franchises lodging properties under brand names, including Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Extended Stay Hotel, Cambria hotels & suites, and Ascend Hotel Collection. The Company had 6,514 hotels open and 775 hotels under construction, awaiting conversion or approved for development, as of December 31, 2016, representing 516,122 rooms open and 62,547 rooms under construction, awaiting conversion or approved for development in 50 states, the District of Columbia and over 40 countries and territories outside the United States. Its domestic franchising operations are conducted through direct franchising relationships, while its international franchise operations are conducted through a combination of direct franchising and master franchising relationships.

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