Head to Head Analysis: Bloomin’ Brands (BLMN) vs. Starbucks Corporation (SBUX)
Bloomin’ Brands (NASDAQ: BLMN) and Starbucks Corporation (NASDAQ:SBUX) are both retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.
Bloomin’ Brands pays an annual dividend of $0.32 per share and has a dividend yield of 1.9%. Starbucks Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 1.8%. Bloomin’ Brands pays out 35.6% of its earnings in the form of a dividend. Starbucks Corporation pays out 50.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Bloomin’ Brands is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
71.0% of Starbucks Corporation shares are held by institutional investors. 7.0% of Bloomin’ Brands shares are held by company insiders. Comparatively, 3.4% of Starbucks Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Bloomin’ Brands and Starbucks Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Bloomin’ Brands||$4.19 billion||0.41||$402.41 million||$0.90||19.09|
|Starbucks Corporation||$22.40 billion||3.52||$5.14 billion||$1.97||27.75|
Starbucks Corporation has higher revenue and earnings than Bloomin’ Brands. Bloomin’ Brands is trading at a lower price-to-earnings ratio than Starbucks Corporation, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Bloomin’ Brands has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, Starbucks Corporation has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.
This table compares Bloomin’ Brands and Starbucks Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current ratings and recommmendations for Bloomin’ Brands and Starbucks Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Bloomin’ Brands currently has a consensus target price of $20.63, suggesting a potential upside of 20.05%. Starbucks Corporation has a consensus target price of $64.36, suggesting a potential upside of 17.73%. Given Bloomin’ Brands’ higher possible upside, equities research analysts clearly believe Bloomin’ Brands is more favorable than Starbucks Corporation.
Starbucks Corporation beats Bloomin’ Brands on 12 of the 17 factors compared between the two stocks.
About Bloomin’ Brands
Bloomin’ Brands, Inc. is a holding company. The Company owns and operates casual, upscale casual and fine dining restaurants. The Company operates through two segments: U.S. and International. The U.S. segment includes all brands operating in the United States. The International segment includes brands operating outside the United States. As of December 25, 2016, the Company had a portfolio of four restaurant concepts: Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill, and Fleming’s Prime Steakhouse & Wine Bar. OSI Restaurant Partners, LLC (OSI) is the Company’s primary operating entity. New Private Restaurant Properties, LLC (PRP), an indirect subsidiary of the Company, leases the Company-owned restaurant properties to OSI’s subsidiaries. As of December 25, 2016, the Company owned and operated 1,276 restaurants and franchised 240 restaurants across 48 states, Puerto Rico, Guam and 20 countries.
About Starbucks Corporation
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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