Biglari (BH) and Sonic Drive-In (SONC) Head to Head Comparison

Biglari (NYSE: BH) and Sonic Drive-In (NASDAQ:SONC) are both small-cap retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Dividends

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Sonic Drive-In pays an annual dividend of $0.64 per share and has a dividend yield of 2.4%. Biglari does not pay a dividend. Sonic Drive-In pays out 51.2% of its earnings in the form of a dividend.

Institutional & Insider Ownership

91.6% of Biglari shares are held by institutional investors. 54.8% of Biglari shares are held by insiders. Comparatively, 6.2% of Sonic Drive-In 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 Ratings

This is a breakdown of current ratings for Biglari and Sonic Drive-In, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Biglari 0 0 0 0 N/A
Sonic Drive-In 1 8 5 0 2.29

Sonic Drive-In has a consensus price target of $28.50, suggesting a potential upside of 8.65%. Given Sonic Drive-In’s higher probable upside, analysts clearly believe Sonic Drive-In is more favorable than Biglari.

Volatility and Risk

Biglari has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500. Comparatively, Sonic Drive-In has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500.

Profitability

This table compares Biglari and Sonic Drive-In’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Biglari 5.96% 9.39% 4.74%
Sonic Drive-In 16.01% -25.75% 9.94%

Earnings and Valuation

This table compares Biglari and Sonic Drive-In’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Biglari $839.80 million 1.04 $50.07 million N/A N/A
Sonic Drive-In $477.27 million 2.04 $63.66 million $1.25 20.98

Sonic Drive-In has lower revenue, but higher earnings than Biglari.

Summary

Sonic Drive-In beats Biglari on 9 of the 14 factors compared between the two stocks.

About Biglari

Biglari Holdings Inc., through its subsidiaries, operates and franchises restaurants in the United States. The company owns, operates, and franchises restaurants under restaurant concepts, including Steak n Shake, an American brand serving premium burgers and milk shakes; and Western, which offers signature steak dishes and other classic American menu items, as well operates other concepts, such as Great American Steak & Buffet and Wood Grill Buffet consisting of hot and cold food buffet style dining. As of December 31, 2017, it operated 415 Steak n Shake company-operated restaurants and 200 franchised units; and 4 Western company-operated restaurants and 58 franchised units. The company also engages in underwriting commercial trucking insurance, and selling physical damage and non-trucking liability insurance to truckers. In addition, it publishes and sells magazines, and related publishing products and services in print and digital under the Maxim brand name; and licenses media products and services, as well as is involved in the investment activities. The company was formerly known as The Steak n Shake Company and changed its name to Biglari Holdings Inc. in April 2010. Biglari Holdings Inc. was founded in 1934 and is based in San Antonio, Texas.

About Sonic Drive-In

Sonic Corp. operates and franchises a chain of quick-service drive-in restaurants in the United States. As of August 31, 2017, the company operated 3,593 Sonic Drive-Ins in 45 states, of which 228 were owned and operated by the company and 3,365 were owned and operated by franchisees. The company also owns and leases 135 properties; and sublease 53 properties to franchisees and other parties. The company was founded in 1953 and is headquartered in Oklahoma City, Oklahoma.

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