Starbucks (NASDAQ:SBUX) and Giggles N Hugs (OTCMKTS:GIGL) are both retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitability, dividends, valuation and analyst recommendations.

Profitability

This table compares Starbucks and Giggles N Hugs’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Starbucks 18.28% 86.33% 17.45%
Giggles N Hugs -35.15% N/A -103.44%

Valuation and Earnings

This table compares Starbucks and Giggles N Hugs’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Starbucks $24.72 billion 3.28 $4.52 billion $2.42 27.00
Giggles N Hugs $2.45 million 0.45 -$1.62 million N/A N/A

Starbucks has higher revenue and earnings than Giggles N Hugs.

Analyst Ratings

This is a summary of current recommendations and price targets for Starbucks and Giggles N Hugs, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Starbucks 2 11 15 0 2.46
Giggles N Hugs 0 0 0 0 N/A

Starbucks currently has a consensus target price of $66.50, suggesting a potential upside of 1.78%. Given Starbucks’ higher possible upside, equities research analysts plainly believe Starbucks is more favorable than Giggles N Hugs.

Insider and Institutional Ownership

76.1% of Starbucks shares are held by institutional investors. 3.5% of Starbucks shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Starbucks pays an annual dividend of $1.44 per share and has a dividend yield of 2.2%. Giggles N Hugs does not pay a dividend. Starbucks pays out 59.5% of its earnings in the form of a dividend. Starbucks has increased its dividend for 7 consecutive years.

Risk and Volatility

Starbucks has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, Giggles N Hugs has a beta of 7.58, indicating that its share price is 658% more volatile than the S&P 500.

Summary

Starbucks beats Giggles N Hugs on 12 of the 14 factors compared between the two stocks.

Starbucks Company Profile

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates in four segments: Americas; China/Asia Pacific; Europe, Middle East, and Africa; and Channel Development. Its stores offer coffee and tea beverages, roasted whole bean and ground coffees, single-serve and ready-to-drink coffee and tea products, and food and snacks; and various food products, such as pastries, breakfast sandwiches, and lunch items. The company also licenses its trademarks through licensed stores, and grocery and foodservice accounts. It offers its products under the Starbucks, Teavana, Tazo, Seattle's Best Coffee, Evolution Fresh, La Boulange, Ethos, Frappuccino, Starbucks Doubleshot, Starbucks Refreshers, premium Tazo, and Starbucks VIA brand names. As of November 1, 2018, the company operated 29,324 stores. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.

Giggles N Hugs Company Profile

Giggles N' Hugs, Inc. owns and operates kid-friendly restaurants with play areas for children in 10 years and younger in California. It owns and operates a restaurant in the Westfield Topanga shopping center in Woodland Hills; and a restaurant in the Glendale Galleria in Glendale, California. The company was formerly known as Teacher's Pet, Inc. and changed its name to Giggles N' Hugs, Inc. in August 2010. Giggles N' Hugs, Inc. was founded in 2004 and is headquartered in Glendale, California.

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