Aramark (NYSE:ARMK) and CAVA Group (NYSE:CAVA) Critical Comparison

Aramark (NYSE:ARMK) and CAVA Group (NYSE:CAVA) are both consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Analyst Recommendations

This is a summary of current recommendations for Aramark and CAVA Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aramark	0	4	9	0	2.69
CAVA Group	0	6	8	0	2.57

Aramark presently has a consensus price target of $35.82, indicating a potential downside of 0.44%. CAVA Group has a consensus price target of $82.75, indicating a potential downside of 13.59%. Given Aramark’s stronger consensus rating and higher possible upside, analysts clearly believe Aramark is more favorable than CAVA Group.

Profitability

This table compares Aramark and CAVA Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aramark	3.43%	13.82%	3.14%
CAVA Group	3.75%	5.18%	2.98%

Earnings & Valuation

This table compares Aramark and CAVA Group’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aramark	$19.95 billion	0.47	$674.11 million	$2.38	15.12
CAVA Group	$784.62 million	13.92	$13.28 million	$0.41	233.56

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

Volatility and Risk

Aramark has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500. Comparatively, CAVA Group has a beta of 3.27, indicating that its stock price is 227% more volatile than the S&P 500.

Institutional & Insider Ownership

73.2% of CAVA Group shares are owned by institutional investors. 1.9% of Aramark shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Aramark beats CAVA Group on 9 of the 14 factors compared between the two stocks.

About Aramark

Aramark provides food and facilities services to education, healthcare, business and industry, sports, leisure, and corrections clients in the United States and internationally. It operates through two segments, Food and Support Services United States, and Food and Support Services International. The company offers food-related managed services, including dining, catering, food service management, and convenience-oriented retail services; non-clinical food and food-related support services, such as patient food and nutrition, retail food, environmental services, and procurement services; and plant operations and maintenance, custodial/housekeeping, energy management, grounds keeping, and capital project management services. It also provides on-site restaurants, catering, convenience stores, and executive dining services; beverage and vending services; and facility management services comprising landscaping, transportation, capital program management, payment services, and other facility consulting services relating to building operations. In addition, the company offers concessions, banquet, and catering services; retail services and merchandise sale, recreational, and lodging services; and facility management services at sports, entertainment, and recreational facilities. Further, it offers correctional food; and operates commissaries, laundry facilities, and property rooms. It primarily serves business and industry, sports, leisure and corrections, education, healthcare, public institutions, manufacturing, transportation, service, and other industries. The company was formerly known as ARAMARK Holdings Corporation. Aramark was founded in 1959 and is based in Philadelphia, Pennsylvania.

About CAVA Group

CAVA Group, Inc. owns and operates a chain of restaurants under the CAVA brand in the United States. The company also offers dips, spreads, and dressings through grocery stores. In addition, the company provides online and mobile ordering platforms. Cava Group, Inc. was founded in 2006 and is headquartered in Washington, the District of Columbia.