Reviewing Shake Shack (NYSE:SHAK) & TH International (NASDAQ:THCH)

TH International (NASDAQ:THCH) and Shake Shack (NYSE:SHAK) are both retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, valuation, dividends, risk, profitability and institutional ownership.

Institutional and Insider Ownership

91.8% of TH International shares are owned by institutional investors. Comparatively, 86.1% of Shake Shack shares are owned by institutional investors. 8.5% of Shake Shack shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for TH International and Shake Shack, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TH International	1	0	0	0	1.00
Shake Shack	3	14	6	1	2.21

Shake Shack has a consensus price target of $121.00, indicating a potential upside of 25.19%. Given Shake Shack’s stronger consensus rating and higher possible upside, analysts plainly believe Shake Shack is more favorable than TH International.

Profitability

This table compares TH International and Shake Shack’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TH International	-26.38%	N/A	-16.11%
Shake Shack	3.10%	10.43%	3.04%

Earnings and Valuation

This table compares TH International and Shake Shack”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TH International	$1.34 billion	0.07	-$57.32 million	($1.52)	-1.77
Shake Shack	$1.25 billion	3.29	$10.21 million	$0.46	210.12

Shake Shack has lower revenue, but higher earnings than TH International. TH International is trading at a lower price-to-earnings ratio than Shake Shack, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

TH International has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500. Comparatively, Shake Shack has a beta of 1.65, suggesting that its stock price is 65% more volatile than the S&P 500.

Summary

Shake Shack beats TH International on 13 of the 15 factors compared between the two stocks.

About TH International

TH International Limited operates Tim Hortons coffee shops in mainland China, Hong Kong, and Macau. The company offers brewed tea, coffee, milk tea, lemonade, hot chocolate, and coffee drinks. It is also involved in franchise related business. The company is based in Shanghai, the People's Republic of China.

About Shake Shack

Shake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. Its Shacks offers hamburgers, chicken, hot dogs, crinkle cut fries, shakes, frozen custard, beer, wine, and other products. The company was founded in 2001 and is headquartered in New York, New York.