Shake Shack (NYSE:SHAK) and Aramark (NYSE:ARMK) Financial Survey

Shake Shack (NYSE:SHAK) and Aramark (NYSE:ARMK) are both consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Analyst Ratings

This is a summary of current ratings for Shake Shack and Aramark, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shake Shack	0	12	16	0	2.57
Aramark	0	2	12	1	2.93

Shake Shack presently has a consensus price target of $87.22, indicating a potential upside of 30.43%. Aramark has a consensus price target of $69.14, indicating a potential upside of 25.80%. Given Shake Shack’s higher possible upside, equities analysts clearly believe Shake Shack is more favorable than Aramark.

Institutional & Insider Ownership

86.1% of Shake Shack shares are held by institutional investors. 8.3% of Shake Shack shares are held by company insiders. Comparatively, 2.8% of Aramark shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Shake Shack and Aramark’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shake Shack	2.56%	9.29%	2.71%
Aramark	1.93%	17.68%	4.21%

Risk & Volatility

Shake Shack has a beta of 1.68, suggesting that its share price is 68% more volatile than the S&P 500. Comparatively, Aramark has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Earnings and Valuation

This table compares Shake Shack and Aramark”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shake Shack	$1.55 billion	1.84	$45.72 million	$0.94	71.14
Aramark	$18.51 billion	0.78	$326.39 million	$1.43	38.44

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

Summary

Shake Shack beats Aramark on 8 of the 15 factors compared between the two stocks.

About Shake Shack

Shake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. Its Shacks offers hamburgers, chicken, hot dogs, crinkle cut fries, shakes, frozen custard, beer, wine, and other products. The company was founded in 2001 and is headquartered in New York, New York.

About Aramark

Aramark provides food and facilities services to education, healthcare, business and industry, sports, leisure, and corrections clients in the United States and internationally. It operates through two segments, Food and Support Services United States, and Food and Support Services International. The company offers food-related managed services, including dining, catering, food service management, and convenience-oriented retail services; non-clinical food and food-related support services, such as patient food and nutrition, retail food, environmental services, and procurement services; and plant operations and maintenance, custodial/housekeeping, energy management, grounds keeping, and capital project management services. It also provides on-site restaurants, catering, convenience stores, and executive dining services; beverage and vending services; and facility management services comprising landscaping, transportation, capital program management, payment services, and other facility consulting services relating to building operations. In addition, the company offers concessions, banquet, and catering services; retail services and merchandise sale, recreational, and lodging services; and facility management services at sports, entertainment, and recreational facilities. Further, it offers correctional food; and operates commissaries, laundry facilities, and property rooms. It primarily serves business and industry, sports, leisure and corrections, education, healthcare, public institutions, manufacturing, transportation, service, and other industries. The company was formerly known as ARAMARK Holdings Corporation. Aramark was founded in 1959 and is based in Philadelphia, Pennsylvania.