Contrasting Chefs’ Warehouse (NASDAQ:CHEF) & BAB (OTCMKTS:BABB)

Chefs’ Warehouse (NASDAQ:CHEF) and BAB (OTCMKTS:BABB) are both consumer staples companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Risk and Volatility

Chefs’ Warehouse has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500. Comparatively, BAB has a beta of 0.17, suggesting that its share price is 83% less volatile than the S&P 500.

Earnings and Valuation

This table compares Chefs’ Warehouse and BAB”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chefs’ Warehouse	$4.26 billion	0.82	$72.36 million	$1.80	47.37
BAB	$3.44 million	1.88	$560,000.00	$0.08	11.14

Chefs’ Warehouse has higher revenue and earnings than BAB. BAB is trading at a lower price-to-earnings ratio than Chefs’ Warehouse, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Chefs’ Warehouse and BAB, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chefs’ Warehouse	0	2	4	1	2.86
BAB	0	0	0	0	0.00

Chefs’ Warehouse currently has a consensus price target of $80.83, indicating a potential downside of 5.20%. Given Chefs’ Warehouse’s stronger consensus rating and higher probable upside, analysts clearly believe Chefs’ Warehouse is more favorable than BAB.

Profitability

This table compares Chefs’ Warehouse and BAB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chefs’ Warehouse	1.87%	15.54%	4.65%
BAB	16.50%	16.48%	11.69%

Insider and Institutional Ownership

91.6% of Chefs’ Warehouse shares are held by institutional investors. 11.1% of Chefs’ Warehouse shares are held by company insiders. Comparatively, 33.7% of BAB shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Chefs’ Warehouse beats BAB on 10 of the 15 factors compared between the two stocks.

About Chefs’ Warehouse

The Chefs’ Warehouse, Inc., together with its subsidiaries, distributes specialty food and center-of-the-plate products in the United States, the Middle East, and Canada. The company’s product portfolio includes specialty food products, such as artisan charcuterie, specialty cheeses, unique oils and vinegars, truffles, caviar, chocolate, and pastry products; and center-of-the-plate products consisting of custom cut beef, seafood, and hormone-free poultry, as well as broadline food products comprising cooking oils, butter, eggs, milk, and flour. The company serves menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolatiers, cruise lines, casinos, and specialty food stores. It markets its center-of-the-plate products directly to consumers through a mail and e-commerce platform. The Chefs’ Warehouse, Inc. was founded in 1985 and is headquartered in Ridgefield, Connecticut.

About BAB

BAB, Inc. franchises and licenses bagel and muffin retail units under the Big Apple Bagels (BAB), My Favorite Muffin (MFM), and SweetDuet (SD) trade names in the United States. It's BAB franchised brand includes daily baked bagels, flavored cream cheeses, premium coffees, gourmet bagel sandwiches, and other related products; and MFM brand comprises various freshly baked muffins and coffees, as well as units operating as My Favorite Muffin Your All Day Bakery Café features specialty bagel sandwiches and related products. The company's SD brand includes frozen yogurt products. BAB, Inc. was founded in 1993 and is based in Deerfield, Illinois.