Financial Analysis: Churchill Downs (NASDAQ:CHDN) & BJ’s Restaurants (NASDAQ:BJRI)

BJ’s Restaurants (NASDAQ:BJRI) and Churchill Downs (NASDAQ:CHDN) are both consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Profitability

This table compares BJ’s Restaurants and Churchill Downs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BJ’s Restaurants	2.86%	12.93%	4.79%
Churchill Downs	15.15%	39.90%	6.43%

Volatility & Risk

BJ’s Restaurants has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500. Comparatively, Churchill Downs has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.

Institutional & Insider Ownership

100.0% of BJ’s Restaurants shares are held by institutional investors. Comparatively, 82.6% of Churchill Downs shares are held by institutional investors. 2.4% of BJ’s Restaurants shares are held by insiders. Comparatively, 5.9% of Churchill Downs shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares BJ’s Restaurants and Churchill Downs”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BJ’s Restaurants	$1.40 billion	0.94	$48.81 million	$1.87	33.02
Churchill Downs	$2.93 billion	2.30	$383.00 million	$6.44	15.22

Churchill Downs has higher revenue and earnings than BJ’s Restaurants. Churchill Downs is trading at a lower price-to-earnings ratio than BJ’s Restaurants, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for BJ’s Restaurants and Churchill Downs, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BJ’s Restaurants	1	4	4	0	2.33
Churchill Downs	0	1	11	0	2.92

BJ’s Restaurants presently has a consensus price target of $62.00, indicating a potential upside of 0.40%. Churchill Downs has a consensus price target of $126.70, indicating a potential upside of 29.29%. Given Churchill Downs’ stronger consensus rating and higher possible upside, analysts clearly believe Churchill Downs is more favorable than BJ’s Restaurants.

Summary

Churchill Downs beats BJ’s Restaurants on 11 of the 14 factors compared between the two stocks.

About BJ’s Restaurants

BJ’s Restaurants, Inc. owns and operates casual dining restaurants in the United States. Its restaurants offer pizzas, craft and other beers, appetizers, entrées, pastas, sandwiches, specialty salads, and desserts under brand name Pizookie. The company was formerly known as Chicago Pizza & Brewery, Inc. and changed its name to BJ’s Restaurants, Inc. in August 2004. BJ’s Restaurants, Inc. was founded in 1978 and is based in Huntington Beach, California.

About Churchill Downs

Churchill Downs Incorporated operates as a racing, online wagering, and gaming entertainment company in the United States. It operates through three segments: Live and Historical Racing, TwinSpires, and Gaming. The company operates pari-mutuel gaming entertainment venues; TwinSpires, an online wagering platform for horse racing, sports, and iGaming; retail sports books; casino gaming; and Terre Haute Casino Resort. It also offers streaming video of live horse races, replays, and an assortment of racing and handicapping information; and provides the Bloodstock Research Information Services platform for horse racing statistical data. In addition, the company manufactures and operates pari-mutuel wagering systems for racetracks, off-track betting facilities, and other pari-mutuel wagering businesses. Churchill Downs Incorporated was founded in 1875 and is headquartered in Louisville, Kentucky.