Head to Head Contrast: Starbucks (NASDAQ:SBUX) versus Chipotle Mexican Grill (NYSE:CMG)

Starbucks (NASDAQ:SBUX) and Chipotle Mexican Grill (NYSE:CMG) are both large-cap retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, risk, analyst recommendations, profitability, valuation and earnings.

Profitability

This table compares Starbucks and Chipotle Mexican Grill’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Starbucks	3.89%	-29.24%	7.42%
Chipotle Mexican Grill	11.96%	49.64%	16.37%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Starbucks and Chipotle Mexican Grill, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Starbucks	2	10	20	1	2.61
Chipotle Mexican Grill	1	10	24	0	2.66

Starbucks presently has a consensus target price of $107.48, indicating a potential upside of 8.39%. Chipotle Mexican Grill has a consensus target price of $46.03, indicating a potential upside of 44.28%. Given Chipotle Mexican Grill’s stronger consensus rating and higher possible upside, analysts plainly believe Chipotle Mexican Grill is more favorable than Starbucks.

Institutional & Insider Ownership

72.3% of Starbucks shares are owned by institutional investors. Comparatively, 91.3% of Chipotle Mexican Grill shares are owned by institutional investors. 0.0% of Starbucks shares are owned by insiders. Comparatively, 0.5% of Chipotle Mexican Grill shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

Starbucks has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Chipotle Mexican Grill has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500.

Earnings & Valuation

This table compares Starbucks and Chipotle Mexican Grill”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Starbucks	$37.18 billion	3.04	$1.86 billion	$1.32	75.12
Chipotle Mexican Grill	$11.93 billion	3.43	$1.54 billion	$1.09	29.27

Starbucks has higher revenue and earnings than Chipotle Mexican Grill. Chipotle Mexican Grill is trading at a lower price-to-earnings ratio than Starbucks, indicating that it is currently the more affordable of the two stocks.

Summary

Chipotle Mexican Grill beats Starbucks on 10 of the 15 factors compared between the two stocks.

About Starbucks

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of coffee worldwide. The company operates through three segments: North America, International, and Channel Development. Its stores offer coffee and tea beverages, roasted whole beans and ground coffees, single serve products, and ready-to-drink beverages; and various food products, such as pastries, breakfast sandwiches, and lunch items. The company also licenses its trademarks through licensed stores, and grocery and foodservice accounts. The company offers its products under the Starbucks Coffee, Teavana, Seattle’s Best Coffee, Ethos, Starbucks Reserve, and Princi brands. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.

About Chipotle Mexican Grill

Chipotle Mexican Grill, Inc., together with its subsidiaries, owns and operates Chipotle Mexican Grill restaurants. It sells food and beverages through offering burritos, burrito bowls, quesadillas, tacos, and salads. The company also provides delivery and related services its app and website. It has operations in the United States, Canada, France, Germany, and the United Kingdom. Chipotle Mexican Grill, Inc. was founded in 1993 and is headquartered in Newport Beach, California.