Contrasting The Habit Restaurants (HABT) and Starbucks Corporation (SBUX)
The Habit Restaurants (NASDAQ: HABT) and Starbucks Corporation (NASDAQ:SBUX) are both retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, risk, earnings, dividends and analyst recommendations.
Earnings & Valuation
This table compares The Habit Restaurants and Starbucks Corporation’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||0.85||$29.44 million||$0.25||51.40|
|Starbucks Corporation||$22.40 billion||3.59||$5.14 billion||$1.97||28.28|
Starbucks Corporation has higher revenue and earnings than The Habit Restaurants. Starbucks Corporation 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.
Risk & Volatility
The Habit Restaurants has a beta of 1.08, suggesting that its stock price is 8% more 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 The Habit Restaurants and Starbucks Corporation’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%|
This is a breakdown of recent recommendations and price targets for The Habit Restaurants and Starbucks Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The Habit Restaurants||0||3||4||0||2.57|
The Habit Restaurants currently has a consensus price target of $17.93, suggesting a potential upside of 39.52%. Starbucks Corporation has a consensus price target of $64.03, suggesting a potential upside of 14.91%. Given The Habit Restaurants’ higher probable upside, equities analysts clearly believe The Habit Restaurants is more favorable than Starbucks Corporation.
Institutional and Insider Ownership
73.8% of The Habit Restaurants shares are held by institutional investors. Comparatively, 70.8% of Starbucks Corporation shares are held by institutional investors. 16.1% of The Habit Restaurants 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 endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Starbucks Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 1.8%. The Habit Restaurants does not pay a dividend. Starbucks Corporation pays out 50.8% of its earnings in the form of a dividend.
Starbucks Corporation beats The Habit Restaurants on 11 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 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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