Critical Contrast: Noodles & Company (NASDAQ:NDLS) and Biglari (NYSE:BH.A)

Noodles & Company (NASDAQ:NDLS) and Biglari (NYSE:BH.A) are both retail/wholesale companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Institutional & Insider Ownership

65.7% of Noodles & Company shares are held by institutional investors. Comparatively, 7.7% of Biglari shares are held by institutional investors. 2.6% of Noodles & Company shares are held by insiders. Comparatively, 70.9% of Biglari shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Noodles & Company and Biglari, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Noodles & Company	1	1	0	0	1.50
Biglari	0	0	0	0	0.00

Noodles & Company presently has a consensus price target of $3.00, indicating a potential upside of 252.94%. Given Noodles & Company’s stronger consensus rating and higher possible upside, analysts clearly believe Noodles & Company is more favorable than Biglari.

Profitability

This table compares Noodles & Company and Biglari’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Noodles & Company	-9.20%	N/A	-8.54%
Biglari	N/A	N/A	N/A

Valuation & Earnings

This table compares Noodles & Company and Biglari”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Noodles & Company	$493.27 million	0.08	-$36.21 million	($0.99)	-0.86
Biglari	$362.11 million	15.01	$333.66 million	$146.34	16.29

Biglari has lower revenue, but higher earnings than Noodles & Company. Noodles & Company is trading at a lower price-to-earnings ratio than Biglari, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Noodles & Company has a beta of 1.52, suggesting that its share price is 52% more volatile than the S&P 500. Comparatively, Biglari has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Summary

Biglari beats Noodles & Company on 7 of the 12 factors compared between the two stocks.

About Noodles & Company

Noodles & Co. engages in the business of development and operation of fast-casual restaurants that serve noodle and pasta dishes, soups, salads, and appetizers. The firm also offers pleasant dining, pick-up, and delivery experiences by quickly preparing fresh food with friendly service. The company was founded by Aaron Kennedy in 1995 and is headquartered in Broomfield, CO.

About Biglari

Biglari Holdings Inc., through its subsidiaries, primarily operates and franchises restaurants in the United States. The company owns, operates, and franchises restaurants under the Steak n Shake and Western Sizzlin names. As of December 31, 2019, it operated 368 Steak n Shake company-operated restaurants and 213 franchised units; and 4 Western Sizzlin company-operated restaurants and 48 franchised units. The company also engages in underwriting commercial trucking insurance, and selling physical damage and non-trucking liability insurance to truckers; and operates oil and natural gas properties offshore in the Gulf of Mexico. In addition, it publishes and sells magazines, and related publishing products under the MAXIM and Maxim brand name; and licenses media products and services, as well as is involved in the investment activities. The company was formerly known as The Steak n Shake Company and changed its name to Biglari Holdings Inc. in April 2010. Biglari Holdings Inc. was founded in 1934 and is based in San Antonio, Texas.