Critical Contrast: Buffalo Wild Wings (BWLD) vs. BJ’s Restaurants (BJRI)

Buffalo Wild Wings (NASDAQ: BWLD) and BJ’s Restaurants (NASDAQ:BJRI) are both cyclical consumer goods & services companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Profitability

This table compares Buffalo Wild Wings and BJ’s Restaurants’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Buffalo Wild Wings 3.63% 28.88% 7.78%
BJ’s Restaurants 0.97% 3.75% 1.37%

Risk & Volatility

Buffalo Wild Wings has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500. Comparatively, BJ’s Restaurants has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500.

Dividends

BJ’s Restaurants pays an annual dividend of $0.11 per share and has a dividend yield of 0.3%. Buffalo Wild Wings does not pay a dividend. BJ’s Restaurants pays out 7.2% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Buffalo Wild Wings and BJ’s Restaurants’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Buffalo Wild Wings $1.99 billion 1.09 $94.74 million $3.84 36.28
BJ’s Restaurants $993.05 million 0.71 $45.55 million $1.52 22.47

Buffalo Wild Wings has higher revenue and earnings than BJ’s Restaurants. BJ’s Restaurants is trading at a lower price-to-earnings ratio than Buffalo Wild Wings, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

87.4% of Buffalo Wild Wings shares are held by institutional investors. Comparatively, 99.0% of BJ’s Restaurants shares are held by institutional investors. 1.2% of Buffalo Wild Wings shares are held by insiders. Comparatively, 6.8% of BJ’s Restaurants shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Buffalo Wild Wings and BJ’s Restaurants, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Buffalo Wild Wings 1 19 5 0 2.16
BJ’s Restaurants 1 8 1 0 2.00

Buffalo Wild Wings currently has a consensus target price of $134.40, indicating a potential downside of 3.52%. BJ’s Restaurants has a consensus target price of $36.89, indicating a potential upside of 8.02%. Given BJ’s Restaurants’ higher possible upside, analysts clearly believe BJ’s Restaurants is more favorable than Buffalo Wild Wings.

Summary

Buffalo Wild Wings beats BJ’s Restaurants on 11 of the 16 factors compared between the two stocks.

About Buffalo Wild Wings

Buffalo Wild Wings, Inc. is the owner, operator and franchisor of restaurants. As of December 25, 2016, the Company’s made-to-order menu items included 16 sauces and five seasonings, ranging from Sweet BBQ to Blazin. The Company’s restaurants offer 20 to 40 domestic and imported beers on tap, including craft brews, and a selection of bottled beers, wines and liquor. As of December 25, 2016, the Company had company-owned or franchised restaurants in all 50 states and two Canadian provinces. Its franchised restaurants also operate in Mexico, Saudi Arabia, Philippines, Panama and the United Arab Emirates. The Company operates Buffalo Wild Wings, R Taco and PizzaRev restaurants, as well as sells Buffalo Wild Wings and R Taco restaurant franchises. In addition to traditional and boneless chicken wings, the Company’s menu features a range of food items, including sharables, hamburgers, sandwiches, wraps, Buffalito soft tacos, and salads.

About BJ’s Restaurants

BJ’s Restaurants, Inc. owns and operates restaurants. The Company segment includes casual dining company-owned restaurants. Each of its restaurants is operated either as a BJ’s Restaurant & Brewhouse, a BJ’s Restaurant & Brewery, a BJ’s Pizza & Grill or a BJ’s Grill restaurant. The Company’s restaurants offer craft beers and other beers, as well as a selection of appetizers, entrees, pastas, burgers and sandwiches, specialty salads, and desserts, including its warm pizza cookie dessert, the Pizookie. As of February 27, 2017, the Company owned and operated 189 restaurants located in 24 states of Alabama, Arizona, Arkansas, California, Colorado, Florida, Indiana, Kansas, Kentucky, Louisiana, Maryland, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Virginia and Washington.

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