Reviewing Bravo Brio Restaurant Group (BBRG) and Cheesecake Factory (CAKE)

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Bravo Brio Restaurant Group (NASDAQ: CAKE) and Cheesecake Factory (NASDAQ:CAKE) are both retail/wholesale companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Risk and Volatility

Bravo Brio Restaurant Group has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, Cheesecake Factory has a beta of 0.26, meaning that its share price is 74% less volatile than the S&P 500.

Dividends

Cheesecake Factory pays an annual dividend of $1.32 per share and has a dividend yield of 2.5%. Bravo Brio Restaurant Group does not pay a dividend. Cheesecake Factory pays out 50.8% of its earnings in the form of a dividend. Cheesecake Factory has increased its dividend for 5 consecutive years.

Profitability

This table compares Bravo Brio Restaurant Group and Cheesecake Factory’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bravo Brio Restaurant Group -3.86% -15.00% -2.55%
Cheesecake Factory 6.00% 17.87% 8.26%

Analyst Ratings

This is a summary of current ratings and price targets for Bravo Brio Restaurant Group and Cheesecake Factory, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bravo Brio Restaurant Group 0 1 0 0 2.00
Cheesecake Factory 0 13 1 0 2.07

Bravo Brio Restaurant Group currently has a consensus target price of $2.50, indicating a potential downside of 38.27%. Cheesecake Factory has a consensus target price of $51.64, indicating a potential downside of 2.43%. Given Cheesecake Factory’s stronger consensus rating and higher probable upside, analysts plainly believe Cheesecake Factory is more favorable than Bravo Brio Restaurant Group.

Valuation & Earnings

This table compares Bravo Brio Restaurant Group and Cheesecake Factory’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bravo Brio Restaurant Group $407.61 million 0.15 -$9.76 million $0.22 18.41
Cheesecake Factory $2.26 billion 1.07 $157.39 million $2.60 20.36

Cheesecake Factory has higher revenue and earnings than Bravo Brio Restaurant Group. Bravo Brio Restaurant Group is trading at a lower price-to-earnings ratio than Cheesecake Factory, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

34.4% of Bravo Brio Restaurant Group shares are owned by institutional investors. 7.5% of Bravo Brio Restaurant Group shares are owned by insiders. Comparatively, 8.8% of Cheesecake Factory shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Cheesecake Factory beats Bravo Brio Restaurant Group on 14 of the 17 factors compared between the two stocks.

Bravo Brio Restaurant Group Company Profile

Bravo Brio Restaurant Group, Inc. owns and operates Italian restaurants in the United States. It operates full-service Italian restaurants under the BRAVO! Cucina Italiana brand name; Italian chophouse restaurants under the BRIO Tuscan Grille brand name; and full-service American-French bistro restaurant under the Bon Vie brand name. The company's restaurants primarily offer Italian food and wine. As of December 31, 2017, it operated 49 BRAVO! restaurants, 64 BRIO restaurants, and 1 Bon Vie restaurant in 32 states. The company was formerly known as Bravo Development, Inc. and changed its name to Bravo Brio Restaurant Group, Inc. in June 2010. Bravo Brio Restaurant Group, Inc. was incorporated in 1987 and is based in Columbus, Ohio.

Cheesecake Factory Company Profile

The Cheesecake Factory Incorporated operates restaurants in the United States. The company produces cheesecakes and other baked products for own restaurants and international licensees, as well as external foodservice operators, retailers, and distributors. As of August 21, 2018, it operated 215 company-owned restaurants, including 199 restaurants under The Cheesecake Factory brand; 14 restaurants under the Grand Lux Cafe brand; and 2 restaurants under the RockSugar Southeast Asian Kitchen brand, as well as 21 The Cheesecake Factory branded restaurants under licensing agreements internationally. The company was founded in 1972 and is headquartered in Calabasas, California.

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