Texas Roadhouse (NASDAQ: TXRH) and Buffalo Wild Wings (NASDAQ:BWLD) are both retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.
Risk & Volatility
Texas Roadhouse has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Buffalo Wild Wings has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.
Earnings and Valuation
This table compares Texas Roadhouse and Buffalo Wild Wings’ gross revenue, earnings per share and valuation.
||Earnings Per Share
|Buffalo Wild Wings
Texas Roadhouse has higher revenue and earnings than Buffalo Wild Wings. Texas Roadhouse is trading at a lower price-to-earnings ratio than Buffalo Wild Wings, indicating that it is currently the more affordable of the two stocks.
Texas Roadhouse pays an annual dividend of $0.84 per share and has a dividend yield of 1.6%. Buffalo Wild Wings does not pay a dividend. Texas Roadhouse pays out 50.6% of its earnings in the form of a dividend.
This is a summary of current recommendations and price targets for Texas Roadhouse and Buffalo Wild Wings, as reported by MarketBeat.com.
||Strong Buy Ratings
|Buffalo Wild Wings
Texas Roadhouse currently has a consensus price target of $50.56, suggesting a potential downside of 1.20%. Buffalo Wild Wings has a consensus price target of $131.15, suggesting a potential upside of 5.34%. Given Buffalo Wild Wings’ higher possible upside, analysts clearly believe Buffalo Wild Wings is more favorable than Texas Roadhouse.
Institutional and Insider Ownership
86.2% of Texas Roadhouse shares are owned by institutional investors. Comparatively, 88.1% of Buffalo Wild Wings shares are owned by institutional investors. 7.4% of Texas Roadhouse shares are owned by insiders. Comparatively, 1.2% of Buffalo Wild Wings shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares Texas Roadhouse and Buffalo Wild Wings’ net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
|Buffalo Wild Wings
Texas Roadhouse beats Buffalo Wild Wings 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.
Buffalo Wild Wings Company Profile
Buffalo Wild Wings, Inc. is the owner, operator and franchisor of restaurants. As of December 25, 2016, the Company’s made-to-order menu items included 16 sauces and five seasonings, ranging from Sweet BBQ to Blazin. The Company’s restaurants offer 20 to 40 domestic and imported beers on tap, including craft brews, and a selection of bottled beers, wines and liquor. As of December 25, 2016, the Company had company-owned or franchised restaurants in all 50 states and two Canadian provinces. Its franchised restaurants also operate in Mexico, Saudi Arabia, Philippines, Panama and the United Arab Emirates. The Company operates Buffalo Wild Wings, R Taco and PizzaRev restaurants, as well as sells Buffalo Wild Wings and R Taco restaurant franchises. In addition to traditional and boneless chicken wings, the Company’s menu features a range of food items, including sharables, hamburgers, sandwiches, wraps, Buffalito soft tacos, and salads.
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