Contrasting Chipotle Mexican Grill (NYSE:CMG) and Brinker International (NYSE:EAT)
Chipotle Mexican Grill (NYSE:CMG) and Brinker International (NYSE:EAT) are both retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, earnings, risk and analyst recommendations.
Brinker International pays an annual dividend of $1.52 per share and has a dividend yield of 3.8%. Chipotle Mexican Grill does not pay a dividend. Brinker International pays out 43.4% of its earnings in the form of a dividend. Brinker International has increased its dividend for 8 consecutive years.
95.1% of Chipotle Mexican Grill shares are owned by institutional investors. 2.2% of Chipotle Mexican Grill shares are owned by company insiders. Comparatively, 2.7% of Brinker International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This is a summary of recent recommendations and price targets for Chipotle Mexican Grill and Brinker International, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Chipotle Mexican Grill||6||13||13||0||2.22|
Chipotle Mexican Grill currently has a consensus target price of $650.79, suggesting a potential downside of 12.13%. Brinker International has a consensus target price of $44.69, suggesting a potential upside of 13.03%. Given Brinker International’s higher possible upside, analysts clearly believe Brinker International is more favorable than Chipotle Mexican Grill.
This table compares Chipotle Mexican Grill and Brinker International’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Chipotle Mexican Grill||4.08%||19.78%||10.11%|
Earnings and Valuation
This table compares Chipotle Mexican Grill and Brinker International’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Chipotle Mexican Grill||$4.86 billion||4.22||$176.55 million||$9.06||81.74|
|Brinker International||$3.14 billion||0.47||$125.88 million||$3.50||11.30|
Chipotle Mexican Grill has higher revenue and earnings than Brinker International. Brinker International is trading at a lower price-to-earnings ratio than Chipotle Mexican Grill, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Chipotle Mexican Grill has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500. Comparatively, Brinker International has a beta of 0.24, suggesting that its stock price is 76% less volatile than the S&P 500.
Chipotle Mexican Grill beats Brinker International on 11 of the 17 factors compared between the two stocks.
About Chipotle Mexican Grill
Chipotle Mexican Grill, Inc., together with its subsidiaries, operates Chipotle Mexican Grill restaurants. As of December 31, 2018, it operated 2,491 restaurants, including 2,452 Chipotle restaurants in the United States, 37 Chipotle restaurants internationally, and two non-Chipotle restaurants. The company was founded in 1993 and is headquartered in Newport Beach, California.
About Brinker International
Brinker International, Inc., together with its subsidiaries, owns, develops, operates, and franchises casual dining restaurants in the United States and internationally. As of June 27, 2018, it owned, operated, or franchised 1,686 restaurants comprising 997 company-owned restaurants and 689 franchised restaurants under the Chili's Grill & Bar and Maggiano's Little Italy brand names. The company was founded in 1975 and is based in Dallas, Texas.
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