Shake Shack (NYSE: SHAK) and Bojangles’ (NASDAQ:BOJA) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, dividends and valuation.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Shake Shack and Bojangles’, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shake Shack 0 7 4 0 2.36
Bojangles’ 0 8 2 0 2.20

Given Bojangles”s higher possible upside, analysts plainly believe Bojangles’ is more favorable than Shake Shack.

Risk and Volatility

Shake Shack has a beta of 1.39, suggesting that its share price is 39% more volatile than the S&P 500. Comparatively, Bojangles’ has a beta of 1.91, suggesting that its share price is 91% more volatile than the S&P 500.

Valuation and Earnings

This table compares Shake Shack and Bojangles”s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Shake Shack $268.48 million 5.06 $12.44 million $0.62 59.66
Bojangles’ $531.88 million 0.89 $37.71 million $0.86 14.77

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

Profitability

This table compares Shake Shack and Bojangles”s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shake Shack 4.78% 9.65% 3.66%
Bojangles’ 6.13% 15.11% 5.99%

Insider and Institutional Ownership

83.9% of Shake Shack shares are owned by institutional investors. Comparatively, 91.4% of Bojangles’ shares are owned by institutional investors. 34.9% of Shake Shack shares are owned by company insiders. Comparatively, 55.3% of Bojangles’ shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Bojangles’ beats Shake Shack on 10 of the 14 factors compared between the two stocks.

Shake Shack Company Profile

Shake Shack Inc. operates roadside burger stands. The Company serves an American menu of burgers, hot dogs, crispy chicken, frozen custard, crinkle cut fries, shakes, beer and wine, among others. The Company’s signature items are its all-natural, hormone and antibiotic-free burgers, hot dogs, crispy chicken, crinkle cut fries, shakes and frozen custard. Its menu focuses on food and beverages, crafted from a range of classic American foods. The Company’s domestic menu includes a range of signature items, such as the ShackBurger, SmokeShack, Shack-cago Dog, ‘Shroom Burger, seasonal frozen custard, hand-spun shakes, concretes, ShackMeister Ale, and Shack Red and Shack White wines. As of December 28, 2016, it had 114 Shacks in 13 countries and 16 states, as well as the District of Columbia. Its burgers are made with a whole-muscle blend of all-natural, hormone and antibiotic-free Angus beef, ground fresh daily, cooked to order and served on a non-genetically modified organism potato bun.

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.

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