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

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

Institutional and Insider Ownership

94.8% of Texas Roadhouse shares are owned by institutional investors. Comparatively, 100.0% of BJ’s Restaurants shares are owned by institutional investors. 0.5% of Texas Roadhouse shares are owned by company insiders. Comparatively, 2.4% of BJ’s Restaurants shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

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

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Texas Roadhouse and BJ’s Restaurants, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Texas Roadhouse	1	9	14	2	2.65
BJ’s Restaurants	1	4	4	0	2.33

Texas Roadhouse presently has a consensus price target of $208.04, suggesting a potential upside of 13.14%. BJ’s Restaurants has a consensus price target of $62.00, suggesting a potential upside of 11.37%. Given Texas Roadhouse’s stronger consensus rating and higher probable upside, analysts plainly believe Texas Roadhouse is more favorable than BJ’s Restaurants.

Volatility & Risk

Texas Roadhouse has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500. Comparatively, BJ’s Restaurants has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Texas Roadhouse	$5.88 billion	2.05	$405.55 million	$6.25	29.42
BJ’s Restaurants	$1.40 billion	0.85	$48.81 million	$1.87	29.77

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.

Summary

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

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.

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.