Bob Evans Farms (NASDAQ: BOBE) and BJ’s Restaurants (NASDAQ:BJRI) are both small-cap retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, institutional ownership, analyst recommendations and profitability.

Profitability

This table compares Bob Evans Farms and BJ’s Restaurants’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bob Evans Farms 19.49% 19.52% 7.55%
BJ’s Restaurants 3.82% 14.51% 5.71%

Dividends

Bob Evans Farms pays an annual dividend of $1.36 per share and has a dividend yield of 1.8%. BJ’s Restaurants does not pay a dividend. Bob Evans Farms pays out 22.1% of its earnings in the form of a dividend. Bob Evans Farms has increased its dividend for 9 consecutive years.

Analyst Ratings

This is a summary of recent ratings and target prices for Bob Evans Farms and BJ’s Restaurants, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bob Evans Farms 0 6 1 0 2.14
BJ’s Restaurants 2 7 1 0 1.90

Bob Evans Farms presently has a consensus price target of $74.40, indicating a potential downside of 3.89%. BJ’s Restaurants has a consensus price target of $39.00, indicating a potential upside of 33.79%. Given BJ’s Restaurants’ higher probable upside, analysts clearly believe BJ’s Restaurants is more favorable than Bob Evans Farms.

Earnings & Valuation

This table compares Bob Evans Farms and BJ’s Restaurants’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Bob Evans Farms $418.17 million 3.69 $64.75 million $6.16 12.57
BJ’s Restaurants $1.02 billion 0.61 $122.11 million $1.71 17.05

BJ’s Restaurants has higher revenue and earnings than Bob Evans Farms. Bob Evans Farms is trading at a lower price-to-earnings ratio than BJ’s Restaurants, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

76.9% of Bob Evans Farms shares are held by institutional investors. Comparatively, 99.6% of BJ’s Restaurants shares are held by institutional investors. 1.2% of Bob Evans Farms shares are held by company insiders. Comparatively, 6.8% of BJ’s Restaurants shares are held 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.

Volatility & Risk

Bob Evans Farms has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500. Comparatively, BJ’s Restaurants has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500.

Summary

Bob Evans Farms beats BJ’s Restaurants on 9 of the 16 factors compared between the two stocks.

About Bob Evans Farms

Bob Evans Farms, Inc. (Bob Evans) is a producer and distributor of refrigerated potato, pasta and vegetable-based side dishes, pork sausage, and a variety of refrigerated and frozen food items under the Bob Evans and Owens or Country Creek brand names. The Company’s food products are distributed to customers throughout the United States. Additionally, the Company manufactures and sells similar products to foodservice customers, restaurants and food sellers. The Company operates through BEF Foods segment. The BEF Foods segment offers a range of wholesome food products to retail and foodservice customers. The Company produces food products in its four manufacturing facilities. It produces sausage products at its plants located in Hillsdale, Michigan, and Xenia, Ohio.

About BJ’s Restaurants

BJ’s Restaurants, Inc. owns and operates restaurants. The Company segment includes casual dining company-owned restaurants. Each of its restaurants is operated either as a BJ’s Restaurant & Brewhouse, a BJ’s Restaurant & Brewery, a BJ’s Pizza & Grill or a BJ’s Grill restaurant. The Company’s restaurants offer craft beers and other beers, as well as a selection of appetizers, entrees, pastas, burgers and sandwiches, specialty salads, and desserts, including its warm pizza cookie dessert, the Pizookie. As of February 27, 2017, the Company owned and operated 189 restaurants located in 24 states of Alabama, Arizona, Arkansas, California, Colorado, Florida, Indiana, Kansas, Kentucky, Louisiana, Maryland, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Virginia and Washington.

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