Financial Survey: Sabre (NASDAQ:SABR) vs. Brinker International (NYSE:EAT)

Sabre (NASDAQ:SABR) and Brinker International (NYSE:EAT) are both consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Sabre and Brinker International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sabre	1	3	1	0	2.00
Brinker International	0	6	17	1	2.79

Sabre currently has a consensus price target of $1.75, suggesting a potential downside of 18.03%. Brinker International has a consensus price target of $243.38, suggesting a potential upside of 25.39%. Given Brinker International’s stronger consensus rating and higher possible upside, analysts clearly believe Brinker International is more favorable than Sabre.

Earnings & Valuation

This table compares Sabre and Brinker International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sabre	$2.85 billion	0.30	$524.62 million	$1.65	1.29
Brinker International	$5.81 billion	1.40	$487.00 million	$10.89	17.82

Sabre has higher earnings, but lower revenue than Brinker International. Sabre is trading at a lower price-to-earnings ratio than Brinker International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Sabre and Brinker International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sabre	25.14%	N/A	-2.12%
Brinker International	8.39%	122.35%	17.42%

Volatility & Risk

Sabre has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, Brinker International has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Institutional and Insider Ownership

89.4% of Sabre shares are owned by institutional investors. 2.8% of Sabre shares are owned by insiders. Comparatively, 1.4% of Brinker International shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Sabre pays an annual dividend of $0.56 per share and has a dividend yield of 26.2%. Brinker International pays an annual dividend of $1.52 per share and has a dividend yield of 0.8%. Sabre pays out 33.9% of its earnings in the form of a dividend. Brinker International pays out 14.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary

Brinker International beats Sabre on 12 of the 17 factors compared between the two stocks.

About Sabre

Sabre Corporation, together with its subsidiaries, operates as software and technology company for travel industry in the United States, Europe, Asia-Pacific, and internationally. It operates through two segments: Travel Solutions and Hospitality Solutions. The Travel Solutions segment operates a business-to-business travel marketplace that offers travel content, such as inventory, prices, and availability from a range of travel suppliers, including airlines, hotels, car rental brands, rail carriers, cruise lines, and tour operators with a network of travel buyers comprising online and offline travel agencies, travel management companies, and corporate travel departments. This segment provides a portfolio of software technology products and solutions through software-as-a-service (SaaS) and hosted delivery models to airlines and other travel suppliers. Its products include reservation systems for carriers, commercial and operations products, agency solutions, and data-driven intelligence solutions. Its Hospitality Solutions segment provides software and solutions to hoteliers through SaaS and hosted delivery models. Sabre Corporation was incorporated in 2006 and is headquartered in Southlake, Texas.

About Brinker International

Brinker International, Inc., together with its subsidiaries, engages in the ownership, development, operation, and franchising of casual dining restaurants in the United States and internationally. It operates and franchises Chili's Grill & Bar and Maggiano's Little Italy restaurant brands. The company also operates virtual brands, It's Just Wings. Brinker International, Inc. was founded in 1975 and is headquartered in Dallas, Texas.