Critical Contrast: Brinker International (NYSE:EAT) vs. Accel Entertainment (NYSE:ACEL)

Accel Entertainment (NYSE:ACEL) and Brinker International (NYSE:EAT) are both consumer discretionary companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, valuation, institutional ownership, profitability, earnings and dividends.

Volatility & Risk

Accel Entertainment has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, Brinker International has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500.

Institutional & Insider Ownership

55.4% of Accel Entertainment shares are owned by institutional investors. 14.5% of Accel Entertainment shares are owned by company insiders. Comparatively, 1.4% of Brinker International shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Accel Entertainment	4.08%	22.30%	5.59%
Brinker International	8.39%	122.35%	17.42%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Accel Entertainment and Brinker International, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Accel Entertainment	0	3	4	0	2.57
Brinker International	0	7	16	0	2.70

Accel Entertainment currently has a consensus target price of $14.80, indicating a potential upside of 27.08%. Brinker International has a consensus target price of $243.80, indicating a potential upside of 13.23%. Given Accel Entertainment’s higher probable upside, equities research analysts plainly believe Accel Entertainment is more favorable than Brinker International.

Earnings and Valuation

This table compares Accel Entertainment and Brinker International”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Accel Entertainment	$1.39 billion	0.68	$51.47 million	$0.67	17.38
Brinker International	$5.81 billion	1.55	$487.00 million	$10.89	19.77

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

Summary

Brinker International beats Accel Entertainment on 11 of the 14 factors compared between the two stocks.

About Accel Entertainment

Accel Entertainment, Inc., together with its subsidiaries, operates as a distributed gaming operator in the United States. It is involved in the installation, maintenance, and operation of gaming terminals; redemption devices that disburse winnings and contain automated teller machine (ATM) functionality; and other amusement devices in authorized non-casino locations, such as restaurants, bars, taverns, convenience stores, liquor stores, truck stops, and grocery stores. The company also provides gaming solutions to the location partners. In addition, it operates stand-alone ATMs in gaming and non-gaming locations, as well as amusement devices, including jukeboxes, dartboards, pool tables, and other related entertainment equipment. The company is headquartered in Burr Ridge, Illinois.

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.