Bojangles’ (NASDAQ: BOJA) and El Pollo Loco Holdings (NASDAQ:LOCO) are both small-cap retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, profitability, institutional ownership, analyst recommendations, dividends and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Bojangles’ and El Pollo Loco Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bojangles’ 0 5 3 2 2.70
El Pollo Loco Holdings 0 4 1 0 2.20

Bojangles’ currently has a consensus target price of $19.50, indicating a potential upside of 47.73%. El Pollo Loco Holdings has a consensus target price of $14.67, indicating a potential upside of 26.98%. Given Bojangles”s stronger consensus rating and higher probable upside, analysts plainly believe Bojangles’ is more favorable than El Pollo Loco Holdings.

Insider & Institutional Ownership

91.6% of Bojangles’ shares are owned by institutional investors. Comparatively, 77.0% of El Pollo Loco Holdings shares are owned by institutional investors. 55.3% of Bojangles’ shares are owned by insiders. Comparatively, 45.9% of El Pollo Loco Holdings shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Bojangles’ and El Pollo Loco Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bojangles’ 6.70% 17.05% 6.47%
El Pollo Loco Holdings 4.66% 9.56% 5.52%

Volatility and Risk

Bojangles’ has a beta of 1.98, indicating that its share price is 98% more volatile than the S&P 500. Comparatively, El Pollo Loco Holdings has a beta of 0.31, indicating that its share price is 69% less volatile than the S&P 500.

Valuation and Earnings

This table compares Bojangles’ and El Pollo Loco Holdings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Bojangles’ $538.50 million 0.91 $79.81 million $0.95 13.89
El Pollo Loco Holdings $393.64 million 1.13 $62.17 million $0.46 25.11

Bojangles’ has higher revenue and earnings than El Pollo Loco Holdings. Bojangles’ is trading at a lower price-to-earnings ratio than El Pollo Loco Holdings, indicating that it is currently the more affordable of the two stocks.

Summary

Bojangles’ beats El Pollo Loco Holdings on 13 of the 15 factors compared between the two stocks.

Bojangles’ Company Profile

Bojangles’, Inc. is a restaurant operator and franchisor. The Company offers food made from its Southern recipes. The Company’s menu includes its made-from-scratch, buttermilk biscuits baked fresh every 20 minutes; its fresh, never-frozen bone-in fried chicken; its fixin’s; its Bo-Smart menu featuring items, such as salads, grilled chicken sandwiches, roasted chicken bites and fat-free green beans; its freshly baked and delicious sweets menu, and its Legendary Iced Tea. The Company’s food is offered a la carte and in combos. The Company’s chicken, fixin’s, biscuits and Legendary Iced Tea may also be ordered in boxes or family meals, and larger combinations may be offered as tailgate specials or may be packaged in its Big Bo Box. The Company offers Southern style mac ‘n cheese made from two cheeses; fat-free green beans; cole slaw, and mashed potatoes with gravy. Its menu also features salads, sandwiches and its whole meat Roasted Chicken Bites.

El Pollo Loco Holdings Company Profile

El Pollo Loco Holdings, Inc. specializes in fire-grilling citrus-marinated chicken and operates in the limited service restaurant (LSR) segment. The Company’s menu features its signature product, citrus-marinated fire-grilled chicken, and a range of Mexican-inspired entrees that it creates from chicken. Every day in every restaurant, the Company marinates and fire-grills its chicken over open flames, and hand-slices whole tomatoes, avocados, serrano peppers and cilantro to make its salsas, guacamole and cilantro dressings from scratch. The Company also offers burritos, salads, tostadas, bowls, stuffed quesadillas and chicken entrees. The Company’s entrees include Chicken Avocado Burrito, Under 500 Calorie entrees, Ultimate Pollo Bowl, and Stuffed Chicken Avocado Quesadilla. As of December 28, 2016, the Company had 460 restaurants, consisting of 201 Company-operated and 259 franchised restaurants. The Company also offers additional proteins, such as shrimp, carnitas and beef.

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