Analyzing BJ’s Restaurants (BJRI) & Aramark (ARMK)

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

Insider & Institutional Ownership

99.6% of BJ’s Restaurants shares are held by institutional investors. Comparatively, 94.8% of Aramark shares are held by institutional investors. 6.8% of BJ’s Restaurants shares are held by insiders. Comparatively, 2.9% of Aramark shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
BJ’s Restaurants 3.82% 14.51% 5.71%
Aramark 2.37% 19.29% 4.11%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for BJ’s Restaurants and Aramark, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BJ’s Restaurants 2 7 1 0 1.90
Aramark 0 2 3 1 2.83

BJ’s Restaurants presently has a consensus price target of $39.00, suggesting a potential upside of 30.87%. Aramark has a consensus price target of $43.00, suggesting a potential upside of 6.30%. Given BJ’s Restaurants’ higher probable upside, analysts plainly believe BJ’s Restaurants is more favorable than Aramark.

Valuation and Earnings

This table compares BJ’s Restaurants and Aramark’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BJ’s Restaurants $1.02 billion 0.63 $122.11 million $1.71 17.43
Aramark $14.49 billion 0.68 $1.29 billion $1.37 29.53

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

Volatility & Risk

BJ’s Restaurants has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500. Comparatively, Aramark has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500.

Dividends

Aramark pays an annual dividend of $0.41 per share and has a dividend yield of 1.0%. BJ’s Restaurants does not pay a dividend. Aramark pays out 29.9% of its earnings in the form of a dividend. Aramark has raised its dividend for 2 consecutive years.

Summary

Aramark beats BJ’s Restaurants on 10 of the 18 factors compared between the two stocks.

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.

Aramark Company Profile

Aramark is a global provider of food, facilities and uniform services to education, healthcare, business and industry, and sports, leisure and corrections clients. The Company operates through three segments: Food and Support Services North America (FSS North America), Food and Support Services International (FSS International), and Uniform and Career Apparel (Uniform). FSS North America and FSS International segments include food, refreshment, specialized dietary and support services, including facility maintenance and housekeeping, provided to business, educational and healthcare institutions and in sports, leisure and other facilities. The Uniform segment includes rental, sale, cleaning, maintenance and delivery of personalized uniforms and other textile items to clients in a range of industries in the United States, Puerto Rico, Japan and Canada, including manufacturing, transportation, construction, restaurants and hotels, healthcare and pharmaceutical industries.

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