Bojangles’ (NASDAQ: BOJA) and Shake Shack (NYSE:SHAK) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.
This is a summary of current ratings and price targets for Bojangles’ and Shake Shack, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Bojangles’ presently has a consensus target price of $17.38, suggesting a potential upside of 36.81%. Shake Shack has a consensus target price of $37.18, suggesting a potential upside of 0.55%. Given Bojangles”s higher probable upside, analysts clearly believe Bojangles’ is more favorable than Shake Shack.
Valuation and Earnings
This table compares Bojangles’ and Shake Shack’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Bojangles’||$531.88 million||0.89||$37.71 million||$0.86||14.77|
|Shake Shack||$268.48 million||5.06||$12.44 million||$0.62||59.65|
Bojangles’ has higher revenue and earnings than Shake Shack. Bojangles’ is trading at a lower price-to-earnings ratio than Shake Shack, indicating that it is currently the more affordable of the two stocks.
This table compares Bojangles’ and Shake Shack’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
Bojangles’ has a beta of 1.91, indicating that its stock price is 91% more volatile than the S&P 500. Comparatively, Shake Shack has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500.
Institutional and Insider Ownership
90.8% of Bojangles’ shares are held by institutional investors. Comparatively, 83.9% of Shake Shack shares are held by institutional investors. 55.3% of Bojangles’ shares are held by company insiders. Comparatively, 34.9% of Shake Shack shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Bojangles’ beats Shake Shack on 10 of the 14 factors compared between the two stocks.
Bojangles’ Company Profile
Bojangles’, Inc. is a restaurant operator and franchisor. The Company offers food made from its Southern recipes. The Company’s menu includes its made-from-scratch, buttermilk biscuits baked fresh every 20 minutes; its fresh, never-frozen bone-in fried chicken; its fixin’s; its Bo-Smart menu featuring items, such as salads, grilled chicken sandwiches, roasted chicken bites and fat-free green beans; its freshly baked and delicious sweets menu, and its Legendary Iced Tea. The Company’s food is offered a la carte and in combos. The Company’s chicken, fixin’s, biscuits and Legendary Iced Tea may also be ordered in boxes or family meals, and larger combinations may be offered as tailgate specials or may be packaged in its Big Bo Box. The Company offers Southern style mac ‘n cheese made from two cheeses; fat-free green beans; cole slaw, and mashed potatoes with gravy. Its menu also features salads, sandwiches and its whole meat Roasted Chicken Bites.
Shake Shack Company Profile
Shake Shack Inc. operates roadside burger stands. The Company serves an American menu of burgers, hot dogs, crispy chicken, frozen custard, crinkle cut fries, shakes, beer and wine, among others. The Company’s signature items are its all-natural, hormone and antibiotic-free burgers, hot dogs, crispy chicken, crinkle cut fries, shakes and frozen custard. Its menu focuses on food and beverages, crafted from a range of classic American foods. The Company’s domestic menu includes a range of signature items, such as the ShackBurger, SmokeShack, Shack-cago Dog, ‘Shroom Burger, seasonal frozen custard, hand-spun shakes, concretes, ShackMeister Ale, and Shack Red and Shack White wines. As of December 28, 2016, it had 114 Shacks in 13 countries and 16 states, as well as the District of Columbia. Its burgers are made with a whole-muscle blend of all-natural, hormone and antibiotic-free Angus beef, ground fresh daily, cooked to order and served on a non-genetically modified organism potato bun.
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