Texas Roadhouse (NASDAQ:TXRH) and Chipotle Mexican Grill (NYSE:CMG) are both retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, dividends and valuation.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Texas Roadhouse and Chipotle Mexican Grill, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Texas Roadhouse | 0 | 16 | 7 | 1 | 2.38 |
Chipotle Mexican Grill | 0 | 13 | 19 | 0 | 2.59 |
Texas Roadhouse currently has a consensus price target of $71.7826, suggesting a potential downside of 9.95%. Chipotle Mexican Grill has a consensus price target of $1,375.7931, suggesting a potential downside of 7.92%. Given Chipotle Mexican Grill's stronger consensus rating and higher probable upside, analysts clearly believe Chipotle Mexican Grill is more favorable than Texas Roadhouse.
Volatility & Risk
Texas Roadhouse has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.Comparatively, Chipotle Mexican Grill has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500.
Earnings and Valuation
This table compares Texas Roadhouse and Chipotle Mexican Grill's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Texas Roadhouse | $2.76 billion | 2.01 | $174.45 million | $2.46 | 32.40 |
Chipotle Mexican Grill | $5.59 billion | 7.48 | $350.16 million | $14.05 | 106.35 |
Chipotle Mexican Grill has higher revenue and earnings than Texas Roadhouse. Texas Roadhouse 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.
Insider & Institutional Ownership
91.7% of Texas Roadhouse shares are held by institutional investors. Comparatively, 90.0% of Chipotle Mexican Grill shares are held by institutional investors. 6.2% of Texas Roadhouse shares are held by company insiders. Comparatively, 1.0% of Chipotle Mexican Grill shares are held by company 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.
Profitability
This table compares Texas Roadhouse and Chipotle Mexican Grill's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Texas Roadhouse | 2.19% | 5.97% | 2.60% |
Chipotle Mexican Grill | 4.08% | 16.70% | 5.38% |
Summary
Chipotle Mexican Grill beats Texas Roadhouse on 12 of the 15 factors compared between the two stocks.