The Habit Restaurants (NASDAQ: HABT) and Cracker Barrel Old Country Store (NASDAQ:CBRL) are both retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitability, analyst recommendations and institutional ownership.

Profitability

This table compares The Habit Restaurants and Cracker Barrel Old Country Store’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Habit Restaurants 1.64% 4.97% 2.16%
Cracker Barrel Old Country Store 6.80% 35.27% 13.12%

Risk & Volatility

The Habit Restaurants has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500. Comparatively, Cracker Barrel Old Country Store has a beta of 0.52, suggesting that its share price is 48% less volatile than the S&P 500.

Institutional and Insider Ownership

94.5% of The Habit Restaurants shares are held by institutional investors. Comparatively, 85.9% of Cracker Barrel Old Country Store shares are held by institutional investors. 5.8% of The Habit Restaurants shares are held by company insiders. Comparatively, 1.0% of Cracker Barrel Old Country Store 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.

Earnings & Valuation

This table compares The Habit Restaurants and Cracker Barrel Old Country Store’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Habit Restaurants $307.71 million 0.87 $29.44 million $0.25 52.40
Cracker Barrel Old Country Store $2.93 billion 1.22 $391.90 million $8.27 18.05

Cracker Barrel Old Country Store has higher revenue and earnings than The Habit Restaurants. Cracker Barrel Old Country Store is trading at a lower price-to-earnings ratio than The Habit Restaurants, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for The Habit Restaurants and Cracker Barrel Old Country Store, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Habit Restaurants 0 2 4 0 2.67
Cracker Barrel Old Country Store 1 7 0 0 1.88

The Habit Restaurants presently has a consensus price target of $19.70, indicating a potential upside of 50.38%. Cracker Barrel Old Country Store has a consensus price target of $163.88, indicating a potential upside of 9.81%. Given The Habit Restaurants’ stronger consensus rating and higher possible upside, research analysts plainly believe The Habit Restaurants is more favorable than Cracker Barrel Old Country Store.

Dividends

Cracker Barrel Old Country Store pays an annual dividend of $4.80 per share and has a dividend yield of 3.2%. The Habit Restaurants does not pay a dividend. Cracker Barrel Old Country Store pays out 58.0% of its earnings in the form of a dividend. Cracker Barrel Old Country Store has increased its dividend for 7 consecutive years.

Summary

Cracker Barrel Old Country Store beats The Habit Restaurants on 9 of the 17 factors compared between the two stocks.

About The Habit Restaurants

The Habit Restaurants, Inc. (Habit Burger Grill) is a fast casual restaurant company. The Company is engaged in preparing made-to-order char-grilled burgers and sandwiches featuring tri-tip steak, grilled chicken and sushi-grade albacore tuna cooked over an open flame. In addition, it offers sides, shakes and malts. The Company prepares its burgers with char-grilled preparation, topped with caramelized onions, melted cheese, lettuce and tomatoes. It operates a range of restaurant formats, including end-cap, free-standing, inline, end-cap drive-thru and traditional stand-alone drive-in, primarily within suburban shopping centers and retail settings. As of December 27, 2016, the Company had 172 locations in 15 markets in 10 states and the United Arab Emirates, including franchised/licensed locations (excluding six licensed locations in Santa Barbara County, California).

About Cracker Barrel Old Country Store

Cracker Barrel Old Country Store, Inc. is engaged in the operation and development of the Cracker Barrel Old Country Store concept (Cracker Barrel). The Company’s segments include Restaurant and Retail. As of September 19, 2016, the Company operated 640 Cracker Barrel stores in 43 states. The format of its stores consists of a rustic old country-store design offering a restaurant menu that features home-style country food and a range of decorative and functional items, such as rocking chairs, holiday and seasonal gifts and toys, apparel, cookware and foods. Its restaurants offer home-style country cooking featuring of its own recipes. Its restaurants serve breakfast, lunch and dinner. Its breakfast items include juices, eggs, pancakes, grits, and a range of biscuit specialties. Its lunch and dinner items include country ham, chicken and dumplings, chicken fried chicken, meatloaf, fresh side items and specialty items, such as pinto beans and turnip greens.

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