Analyzing J d Wetherspoon (OTCMKTS:JDWPY) & Cheesecake Factory (NASDAQ:CAKE)

Cheesecake Factory (NASDAQ:CAKE) and J d Wetherspoon (OTCMKTS:JDWPY) are both retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, earnings, profitability and risk.

Dividends

Cheesecake Factory pays an annual dividend of $1.20 per share and has a dividend yield of 1.4%. J d Wetherspoon pays an annual dividend of $0.50 per share and has a dividend yield of 1.1%. Cheesecake Factory pays out 35.1% of its earnings in the form of a dividend.

Insider & Institutional Ownership

94.5% of Cheesecake Factory shares are held by institutional investors. 8.0% of Cheesecake Factory shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Cheesecake Factory and J d Wetherspoon, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cheesecake Factory	3	9	6	0	2.17
J d Wetherspoon	1	0	0	0	1.00

Cheesecake Factory currently has a consensus price target of $67.12, indicating a potential downside of 18.89%. Given Cheesecake Factory’s stronger consensus rating and higher probable upside, analysts clearly believe Cheesecake Factory is more favorable than J d Wetherspoon.

Profitability

This table compares Cheesecake Factory and J d Wetherspoon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cheesecake Factory	4.34%	43.74%	5.81%
J d Wetherspoon	N/A	N/A	N/A

Valuation and Earnings

This table compares Cheesecake Factory and J d Wetherspoon”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cheesecake Factory	$3.75 billion	1.10	$148.43 million	$3.42	24.20
J d Wetherspoon	$2.76 billion	0.36	$88.36 million	N/A	N/A

Cheesecake Factory has higher revenue and earnings than J d Wetherspoon.

Volatility and Risk

Cheesecake Factory has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, J d Wetherspoon has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Summary

Cheesecake Factory beats J d Wetherspoon on 13 of the 14 factors compared between the two stocks.

About Cheesecake Factory

The Cheesecake Factory Incorporated operates and licenses restaurants in the United States and Canada. The company operates bakeries that produce cheesecakes and other baked products for its restaurants, international licensees, third-party bakery customers, external foodservice operators, retailers, and distributors. It operates restaurants under the brands comprising The Cheesecake Factory, North Italia, Flower Child, Fox Restaurant Concepts. The Cheesecake Factory Incorporated was founded in 1972 and is headquartered in Calabasas, California.

About J d Wetherspoon

J D Wetherspoon plc owns and operates pubs and hotels in the United Kingdom and the Republic of Ireland. The company was founded in 1979 and is based in Watford, the United Kingdom.