Comparing Cheesecake Factory (NASDAQ:CAKE) & Sabre (NASDAQ:SABR)

Sabre (NASDAQ:SABR) and Cheesecake Factory (NASDAQ:CAKE) are both consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.

Profitability

This table compares Sabre and Cheesecake Factory’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sabre	25.14%	N/A	-2.12%
Cheesecake Factory	4.61%	43.97%	6.18%

Institutional and Insider Ownership

89.4% of Sabre shares are owned by institutional investors. Comparatively, 94.5% of Cheesecake Factory shares are owned by institutional investors. 2.8% of Sabre shares are owned by company insiders. Comparatively, 8.0% of Cheesecake Factory shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings for Sabre and Cheesecake Factory, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sabre	1	3	1	0	2.00
Cheesecake Factory	2	11	4	1	2.22

Sabre presently has a consensus price target of $1.75, indicating a potential upside of 13.64%. Cheesecake Factory has a consensus price target of $92.67, indicating a potential downside of 17.59%. Given Sabre’s higher probable upside, research analysts plainly believe Sabre is more favorable than Cheesecake Factory.

Earnings & Valuation

This table compares Sabre and Cheesecake Factory”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sabre	$2.77 billion	0.22	$524.62 million	$1.65	0.93
Cheesecake Factory	$3.75 billion	1.49	$148.43 million	$3.69	30.47

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

Volatility and Risk

Sabre has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, Cheesecake Factory has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.

Summary

Cheesecake Factory beats Sabre on 10 of the 14 factors compared between the two stocks.

About Sabre

Sabre Corporation, together with its subsidiaries, operates as software and technology company for travel industry in the United States, Europe, Asia-Pacific, and internationally. It operates through two segments: Travel Solutions and Hospitality Solutions. The Travel Solutions segment operates a business-to-business travel marketplace that offers travel content, such as inventory, prices, and availability from a range of travel suppliers, including airlines, hotels, car rental brands, rail carriers, cruise lines, and tour operators with a network of travel buyers comprising online and offline travel agencies, travel management companies, and corporate travel departments. This segment provides a portfolio of software technology products and solutions through software-as-a-service (SaaS) and hosted delivery models to airlines and other travel suppliers. Its products include reservation systems for carriers, commercial and operations products, agency solutions, and data-driven intelligence solutions. Its Hospitality Solutions segment provides software and solutions to hoteliers through SaaS and hosted delivery models. Sabre Corporation was incorporated in 2006 and is headquartered in Southlake, Texas.

About Cheesecake Factory

The Cheesecake Factory Incorporated operates and licenses restaurants in the United States and Canada. The company operates bakeries that produce cheesecakes and other baked products for its restaurants, international licensees, third-party bakery customers, external foodservice operators, retailers, and distributors. It operates restaurants under the brands comprising The Cheesecake Factory, North Italia, Flower Child, Fox Restaurant Concepts. The Cheesecake Factory Incorporated was founded in 1972 and is headquartered in Calabasas, California.