Analyzing Dutch Bros (NYSE:BROS) & Wingstop (NASDAQ:WING)

Dutch Bros (NYSE:BROS) and Wingstop (NASDAQ:WING) are both mid-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current recommendations for Dutch Bros and Wingstop, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dutch Bros	0	4	20	2	2.92
Wingstop	1	5	21	1	2.79

Dutch Bros currently has a consensus target price of $61.62, indicating a potential upside of 82.27%. Wingstop has a consensus target price of $219.56, indicating a potential upside of 34.47%. Given Dutch Bros’ stronger consensus rating and higher possible upside, analysts plainly believe Dutch Bros is more favorable than Wingstop.

Volatility and Risk

Dutch Bros has a beta of 1.97, indicating that its stock price is 97% more volatile than the S&P 500. Comparatively, Wingstop has a beta of 1.77, indicating that its stock price is 77% more volatile than the S&P 500.

Institutional & Insider Ownership

85.5% of Dutch Bros shares are owned by institutional investors. 38.9% of Dutch Bros shares are owned by company insiders. Comparatively, 0.5% of Wingstop shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Dutch Bros and Wingstop”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dutch Bros	$1.64 billion	3.61	$79.84 million	$0.78	43.35
Wingstop	$696.85 million	6.34	$174.27 million	$4.26	38.33

Wingstop has lower revenue, but higher earnings than Dutch Bros. Wingstop is trading at a lower price-to-earnings ratio than Dutch Bros, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Dutch Bros and Wingstop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dutch Bros	4.91%	10.01%	2.95%
Wingstop	16.03%	-15.80%	18.12%

Summary

Dutch Bros beats Wingstop on 9 of the 15 factors compared between the two stocks.

About Dutch Bros

Dutch Bros Inc., together with its subsidiaries, operates and franchises drive-thru shops in the United States. The company operates through Company-Operated Shops and Franchising and Other segments. It serves through company-operated shops and online channels under Dutch Bros; Dutch Bros Coffee; Dutch Bros Rebel; Dutch Bros; and Blue Rebel brands. Dutch Bros Inc. was founded in 1992 and is headquartered in Grants Pass, Oregon.

About Wingstop

Wingstop Inc., together with its subsidiaries, franchises and operates restaurants under the Wingstop brand. Its restaurants offer classic wings, boneless wings, tenders, and hand-sauced-and-tossed in various flavors, as well as chicken sandwiches with fries and hand-cut carrots and celery that are cooked-to-order. The company was founded in 1994 and is headquartered in Addison, Texas.