Financial Review: BAB (OTCMKTS:BABB) & Chefs’ Warehouse (NASDAQ:CHEF)

BAB (OTCMKTS:BABB) and Chefs’ Warehouse (NASDAQ:CHEF) are both consumer staples companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, profitability, valuation and risk.

Risk & Volatility

BAB has a beta of 0.17, meaning that its share price is 83% less volatile than the S&P 500. Comparatively, Chefs’ Warehouse has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500.

Profitability

This table compares BAB and Chefs’ Warehouse’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BAB	16.50%	16.48%	11.69%
Chefs’ Warehouse	1.87%	15.54%	4.65%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for BAB and Chefs’ Warehouse, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BAB	0	0	0	0	0.00
Chefs’ Warehouse	0	2	4	1	2.86

Chefs’ Warehouse has a consensus price target of $80.83, suggesting a potential upside of 4.25%. Given Chefs’ Warehouse’s stronger consensus rating and higher probable upside, analysts plainly believe Chefs’ Warehouse is more favorable than BAB.

Earnings & Valuation

This table compares BAB and Chefs’ Warehouse”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BAB	$3.44 million	1.88	$560,000.00	$0.08	11.14
Chefs’ Warehouse	$4.15 billion	0.76	$72.36 million	$1.80	43.08

Chefs’ Warehouse has higher revenue and earnings than BAB. BAB is trading at a lower price-to-earnings ratio than Chefs’ Warehouse, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

91.6% of Chefs’ Warehouse shares are owned by institutional investors. 33.7% of BAB shares are owned by company insiders. Comparatively, 11.1% of Chefs’ Warehouse shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Chefs’ Warehouse beats BAB on 10 of the 15 factors compared between the two stocks.

About BAB

BAB, Inc. franchises and licenses bagel and muffin retail units under the Big Apple Bagels (BAB), My Favorite Muffin (MFM), and SweetDuet (SD) trade names in the United States. It's BAB franchised brand includes daily baked bagels, flavored cream cheeses, premium coffees, gourmet bagel sandwiches, and other related products; and MFM brand comprises various freshly baked muffins and coffees, as well as units operating as My Favorite Muffin Your All Day Bakery Café features specialty bagel sandwiches and related products. The company's SD brand includes frozen yogurt products. BAB, Inc. was founded in 1993 and is based in Deerfield, Illinois.

About Chefs’ Warehouse

The Chefs’ Warehouse, Inc., together with its subsidiaries, distributes specialty food and center-of-the-plate products in the United States, the Middle East, and Canada. The company’s product portfolio includes specialty food products, such as artisan charcuterie, specialty cheeses, unique oils and vinegars, truffles, caviar, chocolate, and pastry products; and center-of-the-plate products consisting of custom cut beef, seafood, and hormone-free poultry, as well as broadline food products comprising cooking oils, butter, eggs, milk, and flour. The company serves menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolatiers, cruise lines, casinos, and specialty food stores. It markets its center-of-the-plate products directly to consumers through a mail and e-commerce platform. The Chefs’ Warehouse, Inc. was founded in 1985 and is headquartered in Ridgefield, Connecticut.