Starbucks (SBUX) & Bojangles (BOJA) Critical Review
Starbucks (NASDAQ: SBUX) and Bojangles (NASDAQ:BOJA) are both cyclical consumer goods & services companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.
Insider & Institutional Ownership
70.8% of Starbucks shares are owned by institutional investors. Comparatively, 89.6% of Bojangles shares are owned by institutional investors. 3.4% of Starbucks shares are owned by company insiders. Comparatively, 55.3% of Bojangles shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This is a breakdown of recent recommendations and price targets for Starbucks and Bojangles, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Starbucks presently has a consensus target price of $63.96, suggesting a potential upside of 4.15%. Bojangles has a consensus target price of $16.75, suggesting a potential upside of 38.43%. Given Bojangles’ higher possible upside, analysts clearly believe Bojangles is more favorable than Starbucks.
Volatility and Risk
Starbucks has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Bojangles has a beta of 1.97, suggesting that its stock price is 97% more volatile than the S&P 500.
Starbucks pays an annual dividend of $1.20 per share and has a dividend yield of 2.0%. Bojangles does not pay a dividend. Starbucks pays out 60.9% of its earnings in the form of a dividend.
This table compares Starbucks and Bojangles’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings & Valuation
This table compares Starbucks and Bojangles’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Starbucks||$22.39 billion||3.90||$2.88 billion||$1.97||31.17|
|Bojangles||$531.88 million||0.84||$37.71 million||$0.86||14.07|
Starbucks has higher revenue and earnings than Bojangles. Bojangles is trading at a lower price-to-earnings ratio than Starbucks, indicating that it is currently the more affordable of the two stocks.
Starbucks beats Bojangles on 12 of the 17 factors compared between the two stocks.
Starbucks Corporation (Starbucks) is a roaster, marketer and retailer of coffee. As of October 2, 2016, the Company operated in 75 countries. The Company operates through four segments: Americas, which is inclusive of the United States, Canada, and Latin America; China/Asia Pacific (CAP); Europe, Middle East, and Africa (EMEA), and Channel Development. The Company’s Americas, CAP, and EMEA segments include both company-operated and licensed stores. Its Channel Development segment includes roasted whole bean and ground coffees, Tazo teas, Starbucks- and Tazo-branded single-serve products, a range of ready-to-drink beverages, such as Frappuccino, Starbucks Doubleshot and Starbucks Refreshers beverages and other branded products sold across the world through channels, such as grocery stores, warehouse clubs, specialty retailers, convenience stores and the United States foodservice accounts.
Bojangles’, Inc. is a restaurant operator and franchisor. The Company offers food made from its Southern recipes. The Company’s menu includes its made-from-scratch, buttermilk biscuits baked fresh every 20 minutes; its fresh, never-frozen bone-in fried chicken; its fixin’s; its Bo-Smart menu featuring items, such as salads, grilled chicken sandwiches, roasted chicken bites and fat-free green beans; its freshly baked and delicious sweets menu, and its Legendary Iced Tea. The Company’s food is offered a la carte and in combos. The Company’s chicken, fixin’s, biscuits and Legendary Iced Tea may also be ordered in boxes or family meals, and larger combinations may be offered as tailgate specials or may be packaged in its Big Bo Box. The Company offers Southern style mac ‘n cheese made from two cheeses; fat-free green beans; cole slaw, and mashed potatoes with gravy. Its menu also features salads, sandwiches and its whole meat Roasted Chicken Bites.
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