Head to Head Contrast: Shake Shack (NYSE:SHAK) versus GEN Restaurant Group (NASDAQ:GENK)

GEN Restaurant Group (NASDAQ:GENK) and Shake Shack (NYSE:SHAK) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.

Analyst Recommendations

This is a breakdown of current ratings for GEN Restaurant Group and Shake Shack, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GEN Restaurant Group	1	0	2	0	2.33
Shake Shack	0	15	11	1	2.48

GEN Restaurant Group currently has a consensus target price of $4.50, suggesting a potential upside of 167.06%. Shake Shack has a consensus target price of $117.61, suggesting a potential upside of 29.51%. Given GEN Restaurant Group’s higher possible upside, research analysts plainly believe GEN Restaurant Group is more favorable than Shake Shack.

Volatility and Risk

GEN Restaurant Group has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, Shake Shack has a beta of 1.73, meaning that its share price is 73% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
GEN Restaurant Group	-0.61%	0.51%	0.09%
Shake Shack	3.16%	11.08%	3.23%

Valuation & Earnings

This table compares GEN Restaurant Group and Shake Shack”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GEN Restaurant Group	$212.54 million	0.26	$590,000.00	($0.58)	-2.91
Shake Shack	$1.45 billion	2.68	$45.72 million	$1.09	83.31

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

Insider and Institutional Ownership

10.2% of GEN Restaurant Group shares are owned by institutional investors. Comparatively, 86.1% of Shake Shack shares are owned by institutional investors. 59.1% of GEN Restaurant Group shares are owned by company insiders. Comparatively, 8.5% of Shake Shack shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Shake Shack beats GEN Restaurant Group on 13 of the 15 factors compared between the two stocks.

About GEN Restaurant Group

GEN Restaurant Group, Inc. operates restaurants in California, Arizona, Hawaii, Nevada, Texas, New York, and Florida. It offers meats, poultry, and seafood. The company was founded in 2011 and is based in Cerritos, California.

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.