Red Robin Gourmet Burgers (NASDAQ:RRGB) and Chipotle Mexican Grill (NYSE:CMG) are both retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.
Earnings & Valuation
This table compares Red Robin Gourmet Burgers and Chipotle Mexican Grill's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Red Robin Gourmet Burgers | $1.32 billion | 0.42 | $-7,900,000.00 | $0.62 | 56.79 |
| Chipotle Mexican Grill | $5.59 billion | 7.82 | $350.16 million | $14.05 | 110.32 |
Chipotle Mexican Grill has higher revenue and earnings than Red Robin Gourmet Burgers. Red Robin Gourmet Burgers 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
Red Robin Gourmet Burgers has a beta of 2.85, indicating that its share price is 185% more volatile than the S&P 500. Comparatively, Chipotle Mexican Grill has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent recommendations for Red Robin Gourmet Burgers and Chipotle Mexican Grill, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Red Robin Gourmet Burgers | 2 | 2 | 2 | 0 | 2.00 |
| Chipotle Mexican Grill | 0 | 12 | 19 | 0 | 2.61 |
Red Robin Gourmet Burgers presently has a consensus price target of $27.00, suggesting a potential downside of 23.32%. Chipotle Mexican Grill has a consensus price target of $1,598.9032, suggesting a potential upside of 3.15%. Given Chipotle Mexican Grill's stronger consensus rating and higher possible upside, analysts plainly believe Chipotle Mexican Grill is more favorable than Red Robin Gourmet Burgers.
Profitability
This table compares Red Robin Gourmet Burgers and Chipotle Mexican Grill's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Red Robin Gourmet Burgers | -25.18% | -64.97% | -12.57% |
| Chipotle Mexican Grill | 4.08% | 16.70% | 5.38% |
Institutional and Insider Ownership
97.6% of Red Robin Gourmet Burgers shares are held by institutional investors. Comparatively, 90.0% of Chipotle Mexican Grill shares are held by institutional investors. 2.2% of Red Robin Gourmet Burgers shares are held by insiders. Comparatively, 1.0% of Chipotle Mexican Grill shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Summary
Chipotle Mexican Grill beats Red Robin Gourmet Burgers on 11 of the 14 factors compared between the two stocks.
