Texas Roadhouse (NASDAQ: TXRH) and Chanticleer Holdings (NASDAQ:HOTR) are both retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Profitability

This table compares Texas Roadhouse and Chanticleer Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Texas Roadhouse 5.63% 16.49% 10.94%
Chanticleer Holdings -14.01% -38.80% -16.45%

Risk and Volatility

Texas Roadhouse has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500. Comparatively, Chanticleer Holdings has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500.

Dividends

Texas Roadhouse pays an annual dividend of $0.84 per share and has a dividend yield of 1.8%. Chanticleer Holdings does not pay a dividend. Texas Roadhouse pays out 50.6% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Texas Roadhouse and Chanticleer Holdings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Texas Roadhouse $2.10 billion 1.61 $278.28 million $1.66 28.74
Chanticleer Holdings $41.46 million 0.14 -$378,264.00 ($2.58) -0.88

Texas Roadhouse has higher revenue and earnings than Chanticleer Holdings. Chanticleer Holdings is trading at a lower price-to-earnings ratio than Texas Roadhouse, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

88.4% of Texas Roadhouse shares are owned by institutional investors. Comparatively, 26.0% of Chanticleer Holdings shares are owned by institutional investors. 7.4% of Texas Roadhouse shares are owned by company insiders. Comparatively, 2.5% of Chanticleer Holdings shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Texas Roadhouse and Chanticleer Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Texas Roadhouse 1 10 7 0 2.33
Chanticleer Holdings 0 0 0 0 N/A

Texas Roadhouse currently has a consensus target price of $49.76, suggesting a potential upside of 4.31%. Given Texas Roadhouse’s higher probable upside, analysts clearly believe Texas Roadhouse is more favorable than Chanticleer Holdings.

Summary

Texas Roadhouse beats Chanticleer Holdings on 12 of the 14 factors compared between the two stocks.

About Texas Roadhouse

Texas Roadhouse, Inc. is a restaurant company, which operates in the casual dining segment. The Company offers an assortment of seasoned and aged steaks, all cooked over open grills and all but one hand cut daily on the premises. Its restaurants offer a range of menu items at prices that are designed to appeal to a range of consumer tastes. The Company also offers its guests a selection of ribs, fish, seafood, chicken, pork chops, pulled pork and vegetable plates, and an assortment of hamburgers, salads and sandwiches. The Company offers an assortment of wings, sandwiches, pizzas and burgers, including its bacon grind patty. In addition, the Company also offers its guests a selection of chicken, beef, fish and seafood. Other menu items include specialty appetizers, such as the Cactus Blossom and Rattlesnake Bites. As of December 27, 2016, the Company had 23 franchisees that operated 86 Texas Roadhouse restaurants in 23 states and six foreign countries.

About Chanticleer Holdings

Chanticleer Holdings, Inc. is engaged in the business of owning, operating and franchising fast casual dining concepts domestically and internationally. The Company’s brands include Hooters, American Burger Company (ABC), BGR: the Burger Joint (BGR), BT’s Burger Joint (BT), Little Big Burger (LBB) and Just Fresh. Hooters restaurants are casual beach-themed establishments featuring music, sports on large flat screens, and a menu that includes seafood, burgers, salads and Hooters original chicken wings. ABC is a fast casual dining chain located in North Carolina, South Carolina and New York. BGR consists of approximately 10 Company-owned locations in the United States and over 13 franchisee-operated locations in the United States and the Middle East. LBB consists of approximately eight locations in Oregon. Just Fresh consists of approximately seven Company owned locations in Charlotte, North Carolina.

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