Analyzing BJ’s Restaurants (NASDAQ:BJRI) & Texas Roadhouse (NASDAQ:TXRH)

BJ’s Restaurants (NASDAQ:BJRI) and Texas Roadhouse (NASDAQ:TXRH) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, dividends, risk, institutional ownership, profitability, analyst recommendations and valuation.

Volatility & Risk

BJ’s Restaurants has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500. Comparatively, Texas Roadhouse has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500.

Valuation & Earnings

This table compares BJ’s Restaurants and Texas Roadhouse”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BJ’s Restaurants	$1.40 billion	0.95	$48.81 million	$1.87	33.44
Texas Roadhouse	$5.88 billion	2.04	$405.55 million	$6.25	29.20

Texas Roadhouse has higher revenue and earnings than BJ’s Restaurants. Texas Roadhouse is trading at a lower price-to-earnings ratio than BJ’s Restaurants, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for BJ’s Restaurants and Texas Roadhouse, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BJ’s Restaurants	1	4	4	0	2.33
Texas Roadhouse	1	9	13	2	2.64

BJ’s Restaurants presently has a consensus target price of $62.00, suggesting a potential downside of 0.85%. Texas Roadhouse has a consensus target price of $206.32, suggesting a potential upside of 13.04%. Given Texas Roadhouse’s stronger consensus rating and higher possible upside, analysts plainly believe Texas Roadhouse is more favorable than BJ’s Restaurants.

Profitability

This table compares BJ’s Restaurants and Texas Roadhouse’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BJ’s Restaurants	2.86%	12.93%	4.79%
Texas Roadhouse	6.63%	27.20%	11.75%

Insider and Institutional Ownership

100.0% of BJ’s Restaurants shares are held by institutional investors. Comparatively, 94.8% of Texas Roadhouse shares are held by institutional investors. 2.4% of BJ’s Restaurants shares are held by insiders. Comparatively, 0.5% of Texas Roadhouse shares are held 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.

Summary

Texas Roadhouse beats BJ’s Restaurants on 12 of the 15 factors compared between the two stocks.

About BJ’s Restaurants

BJ’s Restaurants, Inc. owns and operates casual dining restaurants in the United States. Its restaurants offer pizzas, craft and other beers, appetizers, entrées, pastas, sandwiches, specialty salads, and desserts under brand name Pizookie. The company was formerly known as Chicago Pizza & Brewery, Inc. and changed its name to BJ’s Restaurants, Inc. in August 2004. BJ’s Restaurants, Inc. was founded in 1978 and is based in Huntington Beach, California.

About Texas Roadhouse

Texas Roadhouse, Inc., together with its subsidiaries, operates casual dining restaurants in the United States and internationally. It also operates and franchises restaurants under the Texas Roadhouse, Bubba's 33, and Jaggers names in 49 states and ten internationally. Texas Roadhouse, Inc. was founded in 1993 and is based in Louisville, Kentucky.