Texas Roadhouse (NASDAQ:TXRH) and Carrols Restaurant Group (NASDAQ:TAST) are both retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.
This table compares Texas Roadhouse and Carrols Restaurant Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Carrols Restaurant Group||0.15%||3.29%||0.83%|
Valuation & Earnings
This table compares Texas Roadhouse and Carrols Restaurant Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Texas Roadhouse||$2.46 billion||1.57||$158.23 million||$2.20||24.45|
|Carrols Restaurant Group||$1.18 billion||0.31||$10.10 million||$0.30||27.73|
Texas Roadhouse has higher revenue and earnings than Carrols Restaurant Group. Texas Roadhouse is trading at a lower price-to-earnings ratio than Carrols Restaurant Group, indicating that it is currently the more affordable of the two stocks.
Texas Roadhouse pays an annual dividend of $1.20 per share and has a dividend yield of 2.2%. Carrols Restaurant Group does not pay a dividend. Texas Roadhouse pays out 54.5% of its earnings in the form of a dividend. Texas Roadhouse has increased its dividend for 8 consecutive years.
Insider & Institutional Ownership
88.1% of Texas Roadhouse shares are owned by institutional investors. Comparatively, 72.7% of Carrols Restaurant Group shares are owned by institutional investors. 5.9% of Texas Roadhouse shares are owned by company insiders. Comparatively, 4.6% of Carrols Restaurant Group shares are owned 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.
This is a summary of current ratings and recommmendations for Texas Roadhouse and Carrols Restaurant Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Carrols Restaurant Group||0||0||4||0||3.00|
Texas Roadhouse currently has a consensus price target of $63.16, indicating a potential upside of 17.42%. Carrols Restaurant Group has a consensus price target of $15.63, indicating a potential upside of 87.80%. Given Carrols Restaurant Group’s stronger consensus rating and higher possible upside, analysts plainly believe Carrols Restaurant Group is more favorable than Texas Roadhouse.
Risk & Volatility
Texas Roadhouse has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, Carrols Restaurant Group has a beta of 0.4, meaning that its share price is 60% less volatile than the S&P 500.
Texas Roadhouse beats Carrols Restaurant Group on 13 of the 17 factors compared between the two stocks.
Texas Roadhouse Company Profile
Texas Roadhouse, Inc., together with its subsidiaries, operates casual dining restaurants in the United States and internationally. The company operates and franchises Texas Roadhouse and Bubba's 33 restaurants. As of April 29, 2019, it owned and operated approximately 590 restaurants. Texas Roadhouse, Inc. was founded in 1993 and is based in Louisville, Kentucky.
Carrols Restaurant Group Company Profile
Carrols Restaurant Group, Inc., through its subsidiaries, operates franchisee restaurants of Burger King in the United States. As of May 7, 2019, it owned and operated 1,010 Burger King and 55 Popeyes restaurants in 23 states.. The company was founded in 1960 and is headquartered in Syracuse, New York.
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