Analyzing Sweetgreen (NYSE:SG) and Starbucks (NASDAQ:SBUX)

Starbucks (NASDAQ:SBUX) and Sweetgreen (NYSE:SG) are both retail/wholesale companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, earnings, risk and analyst recommendations.

Risk & Volatility

Starbucks has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Sweetgreen has a beta of 1.93, suggesting that its share price is 93% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Starbucks and Sweetgreen, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Starbucks	3	10	15	1	2.48
Sweetgreen	2	10	4	0	2.13

Starbucks currently has a consensus price target of $101.44, suggesting a potential upside of 20.81%. Sweetgreen has a consensus price target of $11.68, suggesting a potential upside of 68.30%. Given Sweetgreen’s higher probable upside, analysts plainly believe Sweetgreen is more favorable than Starbucks.

Profitability

This table compares Starbucks and Sweetgreen’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Starbucks	4.99%	-31.32%	7.48%
Sweetgreen	-16.55%	-25.67%	-13.00%

Insider and Institutional Ownership

72.3% of Starbucks shares are owned by institutional investors. Comparatively, 95.8% of Sweetgreen shares are owned by institutional investors. 0.1% of Starbucks shares are owned by insiders. Comparatively, 19.8% of Sweetgreen shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Starbucks and Sweetgreen”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Starbucks	$37.18 billion	2.57	$1.86 billion	$1.64	51.20
Sweetgreen	$676.83 million	1.21	-$90.37 million	($0.97)	-7.15

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

Summary

Starbucks beats Sweetgreen on 10 of the 15 factors compared between the two stocks.

About Starbucks

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of coffee worldwide. The company operates through three segments: North America, International, and Channel Development. Its stores offer coffee and tea beverages, roasted whole beans and ground coffees, single serve products, and ready-to-drink beverages; and various food products, such as pastries, breakfast sandwiches, and lunch items. The company also licenses its trademarks through licensed stores, and grocery and foodservice accounts. The company offers its products under the Starbucks Coffee, Teavana, Seattle’s Best Coffee, Ethos, Starbucks Reserve, and Princi brands. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.

About Sweetgreen

Sweetgreen, Inc., together with its subsidiaries, operates fast food restaurants serving healthy foods at scale in the United States. The company also accepts orders through its online and mobile ordering platforms, as well as sells gift cards that do not have an expiration date and can be redeemed. The company was founded in 2006 and is headquartered in Los Angeles, California.