Texas Roadhouse (NASDAQ:TXRH) and J Alexanders (NYSE:JAX) are both retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, dividends, valuation, earnings, profitability, risk and institutional ownership.

Volatility & Risk

Texas Roadhouse has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, J Alexanders has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500.

Institutional & Insider Ownership

90.1% of Texas Roadhouse shares are owned by institutional investors. Comparatively, 74.9% of J Alexanders shares are owned by institutional investors. 5.9% of Texas Roadhouse shares are owned by company insiders. Comparatively, 15.0% of J Alexanders shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Texas Roadhouse and J Alexanders’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Texas Roadhouse $2.22 billion 2.08 $131.52 million $1.97 32.71
J Alexanders $233.26 million 0.56 $7.33 million $0.53 16.68

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

Dividends

Texas Roadhouse pays an annual dividend of $1.00 per share and has a dividend yield of 1.6%. J Alexanders does not pay a dividend. Texas Roadhouse pays out 50.8% of its earnings in the form of a dividend. Texas Roadhouse has increased its dividend for 8 consecutive years.

Profitability

This table compares Texas Roadhouse and J Alexanders’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Texas Roadhouse 6.53% 17.39% 11.79%
J Alexanders 3.50% 7.49% 5.22%

Analyst Ratings

This is a summary of recent recommendations for Texas Roadhouse and J Alexanders, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Texas Roadhouse 3 11 5 0 2.11
J Alexanders 0 0 0 0 N/A

Texas Roadhouse presently has a consensus target price of $64.47, suggesting a potential upside of 0.05%. Given Texas Roadhouse’s higher probable upside, equities research analysts plainly believe Texas Roadhouse is more favorable than J Alexanders.

Summary

Texas Roadhouse beats J Alexanders on 14 of the 16 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. The company operates and franchises Texas Roadhouse and Bubba's 33 restaurants. As of October 29, 2018, it owned and operated approximately 575 restaurants. Texas Roadhouse, Inc. was founded in 1993 and is based in Louisville, Kentucky.

About J Alexanders

J. Alexander's Holdings, Inc., through its subsidiaries, owns and operates full service restaurants in the United States. It operates four complementary upscale dining restaurant concepts, including J. Alexander's, Redlands Grill, Lyndhurst Grill, and Stoney River Steakhouse and Grill (Stoney River). The company's restaurants offer American menu. As of September 19, 2018, it operated 45 restaurants in 16 states. J. Alexander's Holdings, Inc. was founded in 1970 and is headquartered in Nashville, Tennessee.

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