Head to Head Review: Carrols Restaurant Group (TAST) versus Chipotle Mexican Grill (CMG)

Carrols Restaurant Group (NASDAQ: TAST) and Chipotle Mexican Grill (NYSE:CMG) are both retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Carrols Restaurant Group and Chipotle Mexican Grill, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carrols Restaurant Group 0 0 1 1 3.50
Chipotle Mexican Grill 6 20 10 0 2.11

Carrols Restaurant Group currently has a consensus price target of $16.50, suggesting a potential upside of 45.37%. Chipotle Mexican Grill has a consensus price target of $402.10, suggesting a potential upside of 26.48%. Given Carrols Restaurant Group’s stronger consensus rating and higher possible upside, research analysts clearly believe Carrols Restaurant Group is more favorable than Chipotle Mexican Grill.

Institutional and Insider Ownership

85.0% of Carrols Restaurant Group shares are owned by institutional investors. Comparatively, 98.4% of Chipotle Mexican Grill shares are owned by institutional investors. 5.3% of Carrols Restaurant Group shares are owned by insiders. Comparatively, 2.0% of Chipotle Mexican Grill shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Carrols Restaurant Group and Chipotle Mexican Grill’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Carrols Restaurant Group $999.03 million 0.40 $80.24 million $0.72 15.76
Chipotle Mexican Grill $4.31 billion 2.10 $397.78 million $4.74 67.07

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

Risk & Volatility

Carrols Restaurant Group has a beta of 0.02, suggesting that its share price is 98% less volatile than the S&P 500. Comparatively, Chipotle Mexican Grill has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Carrols Restaurant Group 3.44% 6.33% 1.86%
Chipotle Mexican Grill 3.17% 10.65% 7.38%

Summary

Chipotle Mexican Grill beats Carrols Restaurant Group on 9 of the 15 factors compared between the two stocks.

Carrols Restaurant Group Company Profile

Carrols Restaurant Group, Inc. is a holding company and conducts all of its operations through its subsidiary, Carrols Corporation (Carrols) and Carrols’ subsidiary, Carrols LLC. The Company is a restaurant company and Burger King franchisee in the United States. As of January 1, 2017, the Company had owned and operated 753 Burger King restaurants under the name Burger King in 16 Northeastern, Midwestern and Southeastern states. Burger King restaurants feature the flame-broiled Whopper sandwich, as well as a range of hamburgers, chicken and other specialty sandwiches, French fries, salads, breakfast items, hot dogs, snacks, smoothies, frappes and other offerings. The Company’s Burger King restaurants are located in various states, such as Illinois, Indiana, Kentucky, Maine, Massachusetts, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Vermont, Virginia and West Virginia.

Chipotle Mexican Grill Company Profile

Chipotle Mexican Grill, Inc. (Chipotle), together with its subsidiaries, operates Chipotle Mexican Grill restaurants. The Company’s Chipotle Mexican Grill restaurants serve a menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. As of December 31, 2016, the Company managed its operations and restaurants based on 11 regions. As of December 31, 2016, the Company operated 2,198 Chipotle restaurants throughout the United States, as well as 29 international Chipotle restaurants, and it also had 23 restaurants in operation in other non-Chipotle concepts. As of December 31, 2016, 29 of its restaurants were located outside of the United States, with 17 in Canada, six in the United Kingdom, five in France and one in Frankfurt, Germany. The Company sells gift cards, which do not have an expiration date. The Company categorizes its restaurants as end-caps (at the end of a line of retail outlets), in-lines (in a line of retail outlets), free-standing or other.

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