Head to Head Analysis: Shake Shack (NYSE:SHAK) versus BJ’s Restaurants (NASDAQ:BJRI)

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

Profitability

This table compares BJ’s Restaurants and Shake Shack’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BJ’s Restaurants	2.23%	12.92%	4.67%
Shake Shack	3.10%	10.43%	3.04%

Volatility & Risk

BJ’s Restaurants has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500. Comparatively, Shake Shack has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.

Earnings and Valuation

This table compares BJ’s Restaurants and Shake Shack”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BJ’s Restaurants	$1.36 billion	0.64	$16.69 million	$1.34	30.88
Shake Shack	$1.25 billion	2.92	$10.21 million	$1.02	84.02

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

Insider and Institutional Ownership

100.0% of BJ’s Restaurants shares are held by institutional investors. Comparatively, 86.1% of Shake Shack shares are held by institutional investors. 4.9% of BJ’s Restaurants shares are held by insiders. Comparatively, 8.5% of Shake Shack shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for BJ’s Restaurants and Shake Shack, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BJ’s Restaurants	2	6	3	0	2.09
Shake Shack	1	15	7	1	2.33

BJ’s Restaurants currently has a consensus price target of $38.75, suggesting a potential downside of 6.36%. Shake Shack has a consensus price target of $119.10, suggesting a potential upside of 38.97%. Given Shake Shack’s stronger consensus rating and higher probable upside, analysts plainly believe Shake Shack is more favorable than BJ’s Restaurants.

Summary

Shake Shack beats BJ’s Restaurants on 9 of the 15 factors compared between the two stocks.

About BJ’s Restaurants

BJ’s Restaurants, Inc. owns and operates casual dining restaurants in the United States. Its restaurants offer pizzas, craft and other beers, appetizers, entrées, pastas, sandwiches, specialty salads, and desserts under brand name Pizookie. The company was formerly known as Chicago Pizza & Brewery, Inc. and changed its name to BJ’s Restaurants, Inc. in August 2004. BJ’s Restaurants, Inc. was founded in 1978 and is based in Huntington Beach, California.

About Shake Shack

Shake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. Its Shacks offers hamburgers, chicken, hot dogs, crinkle cut fries, shakes, frozen custard, beer, wine, and other products. The company was founded in 2001 and is headquartered in New York, New York.