BJ’s Restaurants (NASDAQ:BJRI) & Texas Roadhouse (NASDAQ:TXRH) Critical Contrast

Texas Roadhouse (NASDAQ:TXRH) and BJ’s Restaurants (NASDAQ:BJRI) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, valuation, dividends and profitability.

Volatility & Risk

Texas Roadhouse has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500. Comparatively, BJ’s Restaurants has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500.

Institutional and Insider Ownership

94.8% of Texas Roadhouse shares are owned by institutional investors. Comparatively, 100.0% of BJ’s Restaurants shares are owned by institutional investors. 0.5% of Texas Roadhouse shares are owned by insiders. Comparatively, 2.4% of BJ’s Restaurants shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Texas Roadhouse and BJ’s Restaurants, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Texas Roadhouse	1	9	13	2	2.64
BJ’s Restaurants	1	4	4	0	2.33

Texas Roadhouse currently has a consensus price target of $206.32, indicating a potential upside of 5.02%. BJ’s Restaurants has a consensus price target of $62.00, indicating a potential upside of 0.40%. Given Texas Roadhouse’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Texas Roadhouse is more favorable than BJ’s Restaurants.

Profitability

This table compares Texas Roadhouse and BJ’s Restaurants’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Texas Roadhouse	6.63%	27.20%	11.75%
BJ’s Restaurants	2.86%	12.93%	4.79%

Valuation and Earnings

This table compares Texas Roadhouse and BJ’s Restaurants”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Texas Roadhouse	$5.88 billion	2.19	$405.55 million	$6.25	31.43
BJ’s Restaurants	$1.40 billion	0.94	$48.81 million	$1.87	33.02

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

Summary

Texas Roadhouse beats BJ’s Restaurants on 11 of the 15 factors compared between the two stocks.

About Texas Roadhouse

Texas Roadhouse, Inc., together with its subsidiaries, operates casual dining restaurants in the United States and internationally. It also operates and franchises restaurants under the Texas Roadhouse, Bubba's 33, and Jaggers names in 49 states and ten internationally. Texas Roadhouse, Inc. was founded in 1993 and is based in Louisville, Kentucky.

About BJ’s Restaurants

BJ’s Restaurants, Inc. owns and operates casual dining restaurants in the United States. Its restaurants offer pizzas, craft and other beers, appetizers, entrées, pastas, sandwiches, specialty salads, and desserts under brand name Pizookie. The company was formerly known as Chicago Pizza & Brewery, Inc. and changed its name to BJ’s Restaurants, Inc. in August 2004. BJ’s Restaurants, Inc. was founded in 1978 and is based in Huntington Beach, California.