Head-To-Head Survey: First Watch Restaurant Group (NASDAQ:FWRG) versus Starbucks (NASDAQ:SBUX)

First Watch Restaurant Group (NASDAQ:FWRG) and Starbucks (NASDAQ:SBUX) are both retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, valuation, risk, earnings and institutional ownership.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for First Watch Restaurant Group and Starbucks, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Watch Restaurant Group	1	1	8	1	2.82
Starbucks	3	7	18	0	2.54

First Watch Restaurant Group currently has a consensus target price of $20.91, suggesting a potential upside of 29.39%. Starbucks has a consensus target price of $103.50, suggesting a potential upside of 7.44%. Given First Watch Restaurant Group’s stronger consensus rating and higher possible upside, analysts plainly believe First Watch Restaurant Group is more favorable than Starbucks.

Institutional & Insider Ownership

96.1% of First Watch Restaurant Group shares are held by institutional investors. Comparatively, 72.3% of Starbucks shares are held by institutional investors. 6.0% of First Watch Restaurant Group shares are held by insiders. Comparatively, 0.1% of Starbucks shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

First Watch Restaurant Group has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, Starbucks has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Profitability

This table compares First Watch Restaurant Group and Starbucks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Watch Restaurant Group	0.42%	0.83%	0.31%
Starbucks	4.99%	-31.32%	7.48%

Earnings and Valuation

This table compares First Watch Restaurant Group and Starbucks”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Watch Restaurant Group	$1.17 billion	0.84	$18.92 million	$0.08	202.00
Starbucks	$37.18 billion	2.95	$1.86 billion	$1.64	58.74

Starbucks has higher revenue and earnings than First Watch Restaurant Group. Starbucks is trading at a lower price-to-earnings ratio than First Watch Restaurant Group, indicating that it is currently the more affordable of the two stocks.

Summary

Starbucks beats First Watch Restaurant Group on 8 of the 15 factors compared between the two stocks.

About First Watch Restaurant Group

First Watch Restaurant Group, Inc., through its subsidiaries, operates and franchises restaurants under the First Watch trade name in the United States. The company was formerly known as AI Fresh Super Holdco, Inc. and changed its name to First Watch Restaurant Group, Inc. in December 2019. First Watch Restaurant Group, Inc. was founded in 1983 and is based in Bradenton, Florida.

About Starbucks

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of coffee worldwide. The company operates through three segments: North America, International, and Channel Development. Its stores offer coffee and tea beverages, roasted whole beans and ground coffees, single serve products, and ready-to-drink beverages; 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. The company offers its products under the Starbucks Coffee, Teavana, Seattle’s Best Coffee, Ethos, Starbucks Reserve, and Princi brands. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.