Reviewing Shake Shack (SHAK) and Cracker Barrel Old Country Store (CBRL)

Shake Shack (NYSE: SHAK) and Cracker Barrel Old Country Store (NASDAQ:CBRL) are both retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, dividends, profitability, analyst recommendations, valuation, risk and institutional ownership.

Insider & Institutional Ownership

82.3% of Shake Shack shares are owned by institutional investors. Comparatively, 85.6% of Cracker Barrel Old Country Store shares are owned by institutional investors. 34.9% of Shake Shack shares are owned by insiders. Comparatively, 0.9% of Cracker Barrel Old Country Store shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Cracker Barrel Old Country Store pays an annual dividend of $4.80 per share and has a dividend yield of 3.1%. Shake Shack does not pay a dividend. Cracker Barrel Old Country Store pays out 57.3% of its earnings in the form of a dividend. Shake Shack has increased its dividend for 7 consecutive years.

Risk and Volatility

Shake Shack has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500. Comparatively, Cracker Barrel Old Country Store has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Shake Shack and Cracker Barrel Old Country Store, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shake Shack 1 6 4 0 2.27
Cracker Barrel Old Country Store 1 7 0 0 1.88

Shake Shack currently has a consensus price target of $36.73, indicating a potential upside of 9.63%. Cracker Barrel Old Country Store has a consensus price target of $161.00, indicating a potential upside of 5.35%. Given Shake Shack’s stronger consensus rating and higher possible upside, analysts clearly believe Shake Shack is more favorable than Cracker Barrel Old Country Store.

Profitability

This table compares Shake Shack and Cracker Barrel Old Country Store’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shake Shack 4.70% 8.71% 3.29%
Cracker Barrel Old Country Store 6.90% 35.49% 13.26%

Earnings & Valuation

This table compares Shake Shack and Cracker Barrel Old Country Store’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Shake Shack $315.90 million 2.76 $49.67 million $0.58 57.76
Cracker Barrel Old Country Store $2.93 billion 1.25 $399.48 million $8.38 18.24

Cracker Barrel Old Country Store has higher revenue and earnings than Shake Shack. Cracker Barrel Old Country Store is trading at a lower price-to-earnings ratio than Shake Shack, indicating that it is currently the more affordable of the two stocks.

Summary

Shake Shack beats Cracker Barrel Old Country Store on 9 of the 17 factors compared between the two stocks.

About Shake Shack

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.

About Cracker Barrel Old Country Store

Cracker Barrel Old Country Store, Inc. is engaged in the operation and development of the Cracker Barrel Old Country Store concept (Cracker Barrel). The Company’s segments include Restaurant and Retail. As of September 19, 2016, the Company operated 640 Cracker Barrel stores in 43 states. The format of its stores consists of a rustic old country-store design offering a restaurant menu that features home-style country food and a range of decorative and functional items, such as rocking chairs, holiday and seasonal gifts and toys, apparel, cookware and foods. Its restaurants offer home-style country cooking featuring of its own recipes. Its restaurants serve breakfast, lunch and dinner. Its breakfast items include juices, eggs, pancakes, grits, and a range of biscuit specialties. Its lunch and dinner items include country ham, chicken and dumplings, chicken fried chicken, meatloaf, fresh side items and specialty items, such as pinto beans and turnip greens.

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