Texas Roadhouse (NASDAQ: TXRH) and BJ’s Restaurants (NASDAQ:BJRI) are both retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitabiliy, dividends, analyst recommendations and valuation.
Institutional and Insider Ownership
88.3% of Texas Roadhouse shares are held by institutional investors. Comparatively, 94.5% of BJ’s Restaurants shares are held by institutional investors. 6.6% of Texas Roadhouse shares are held by insiders. Comparatively, 6.8% of BJ’s Restaurants shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Texas Roadhouse and BJ’s Restaurants, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Texas Roadhouse | 1 | 10 | 8 | 0 | 2.37 |
| BJ’s Restaurants | 2 | 7 | 1 | 0 | 1.90 |
Texas Roadhouse currently has a consensus target price of $49.32, suggesting a potential downside of 2.11%. BJ’s Restaurants has a consensus target price of $38.50, suggesting a potential upside of 11.27%. Given BJ’s Restaurants’ higher possible upside, analysts clearly believe BJ’s Restaurants is more favorable than Texas Roadhouse.
Valuation & Earnings
This table compares Texas Roadhouse and BJ’s Restaurants’ revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Texas Roadhouse | $2.04 billion | 1.75 | $271.01 million | $1.60 | 31.49 |
| BJ’s Restaurants | $1.01 billion | 0.74 | $126.57 million | $1.83 | 18.91 |
Texas Roadhouse has higher revenue and earnings than BJ’s Restaurants. BJ’s Restaurants is trading at a lower price-to-earnings ratio than Texas Roadhouse, indicating that it is currently the more affordable of the two stocks.
Dividends
Texas Roadhouse pays an annual dividend of $0.84 per share and has a dividend yield of 1.7%. BJ’s Restaurants does not pay a dividend. Texas Roadhouse pays out 52.5% of its earnings in the form of a dividend.
Profitability
This table compares Texas Roadhouse and BJ’s Restaurants’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Texas Roadhouse | 5.60% | 16.42% | 10.89% |
| BJ’s Restaurants | 4.29% | 14.86% | 6.21% |
Risk & Volatility
Texas Roadhouse has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500. Comparatively, BJ’s Restaurants has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500.
Summary
Texas Roadhouse beats BJ’s Restaurants on 10 of the 16 factors compared between the two stocks.
Texas Roadhouse Company Profile
Texas Roadhouse, Inc. is a restaurant company, which operates in the casual dining segment. The Company offers an assortment of seasoned and aged steaks, all cooked over open grills and all but one hand cut daily on the premises. Its restaurants offer a range of menu items at prices that are designed to appeal to a range of consumer tastes. The Company also offers its guests a selection of ribs, fish, seafood, chicken, pork chops, pulled pork and vegetable plates, and an assortment of hamburgers, salads and sandwiches. The Company offers an assortment of wings, sandwiches, pizzas and burgers, including its bacon grind patty. In addition, the Company also offers its guests a selection of chicken, beef, fish and seafood. Other menu items include specialty appetizers, such as the Cactus Blossom and Rattlesnake Bites. As of December 27, 2016, the Company had 23 franchisees that operated 86 Texas Roadhouse restaurants in 23 states and six foreign countries.
BJ’s Restaurants Company Profile
BJ’s Restaurants, Inc. owns and operates restaurants. The Company segment includes casual dining company-owned restaurants. Each of its restaurants is operated either as a BJ’s Restaurant & Brewhouse, a BJ’s Restaurant & Brewery, a BJ’s Pizza & Grill or a BJ’s Grill restaurant. The Company’s restaurants offer craft beers and other beers, as well as a selection of appetizers, entrees, pastas, burgers and sandwiches, specialty salads, and desserts, including its warm pizza cookie dessert, the Pizookie. As of February 27, 2017, the Company owned and operated 189 restaurants located in 24 states of Alabama, Arizona, Arkansas, California, Colorado, Florida, Indiana, Kansas, Kentucky, Louisiana, Maryland, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Virginia and Washington.
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