Contrasting Cheesecake Factory (NASDAQ:CAKE) and J d Wetherspoon (OTCMKTS:JDWPY)

J d Wetherspoon (OTCMKTS:JDWPY) and Cheesecake Factory (NASDAQ:CAKE) are both retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for J d Wetherspoon and Cheesecake Factory, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
J d Wetherspoon	1	0	0	0	1.00
Cheesecake Factory	3	9	6	0	2.17

Cheesecake Factory has a consensus target price of $67.12, suggesting a potential downside of 18.89%. Given Cheesecake Factory’s stronger consensus rating and higher possible upside, analysts plainly believe Cheesecake Factory is more favorable than J d Wetherspoon.

Valuation & Earnings

This table compares J d Wetherspoon and Cheesecake Factory”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
J d Wetherspoon	$2.76 billion	0.36	$88.36 million	N/A	N/A
Cheesecake Factory	$3.75 billion	1.10	$148.43 million	$3.42	24.20

Cheesecake Factory has higher revenue and earnings than J d Wetherspoon.

Dividends

J d Wetherspoon pays an annual dividend of $0.50 per share and has a dividend yield of 1.1%. Cheesecake Factory pays an annual dividend of $1.20 per share and has a dividend yield of 1.4%. Cheesecake Factory pays out 35.1% of its earnings in the form of a dividend.

Profitability

This table compares J d Wetherspoon and Cheesecake Factory’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
J d Wetherspoon	N/A	N/A	N/A
Cheesecake Factory	4.34%	43.74%	5.81%

Volatility and Risk

J d Wetherspoon has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500. Comparatively, Cheesecake Factory has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.

Insider and Institutional Ownership

94.5% of Cheesecake Factory shares are owned by institutional investors. 8.0% of Cheesecake Factory shares are owned by company 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.

Summary

Cheesecake Factory beats J d Wetherspoon on 13 of the 14 factors compared between the two stocks.

About J d Wetherspoon

J D Wetherspoon plc owns and operates pubs and hotels in the United Kingdom and the Republic of Ireland. The company was founded in 1979 and is based in Watford, the United Kingdom.

About Cheesecake Factory

The Cheesecake Factory Incorporated operates and licenses restaurants in the United States and Canada. The company operates bakeries that produce cheesecakes and other baked products for its restaurants, international licensees, third-party bakery customers, external foodservice operators, retailers, and distributors. It operates restaurants under the brands comprising The Cheesecake Factory, North Italia, Flower Child, Fox Restaurant Concepts. The Cheesecake Factory Incorporated was founded in 1972 and is headquartered in Calabasas, California.