Boyd Gaming (NYSE:BYD) and Texas Roadhouse (NASDAQ:TXRH) Head-To-Head Comparison

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

Volatility and Risk

Texas Roadhouse has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, Boyd Gaming has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.

Valuation & Earnings

This table compares Texas Roadhouse and Boyd Gaming”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Texas Roadhouse	$5.88 billion	1.75	$405.55 million	$6.25	25.01
Boyd Gaming	$4.10 billion	1.18	$1.84 billion	$22.72	2.94

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Texas Roadhouse and Boyd Gaming, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Texas Roadhouse	0	12	10	1	2.52
Boyd Gaming	0	11	3	1	2.33

Texas Roadhouse presently has a consensus target price of $210.48, suggesting a potential upside of 34.63%. Boyd Gaming has a consensus target price of $94.69, suggesting a potential upside of 41.95%. Given Boyd Gaming’s higher possible upside, analysts plainly believe Boyd Gaming is more favorable than Texas Roadhouse.

Profitability

This table compares Texas Roadhouse and Boyd Gaming’s 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%
Boyd Gaming	44.34%	22.52%	8.80%

Dividends

Texas Roadhouse pays an annual dividend of $3.00 per share and has a dividend yield of 1.9%. Boyd Gaming pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. Texas Roadhouse pays out 48.0% of its earnings in the form of a dividend. Boyd Gaming pays out 3.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Texas Roadhouse has raised its dividend for 6 consecutive years and Boyd Gaming has raised its dividend for 4 consecutive years. Texas Roadhouse is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

94.8% of Texas Roadhouse shares are held by institutional investors. Comparatively, 76.8% of Boyd Gaming shares are held by institutional investors. 0.5% of Texas Roadhouse shares are held by insiders. Comparatively, 22.8% of Boyd Gaming shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Texas Roadhouse beats Boyd Gaming on 10 of the 17 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 Boyd Gaming

Boyd Gaming Corporation, together with its subsidiaries, operates as a multi-jurisdictional gaming company in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio, and Pennsylvania. The company operates through Las Vegas Locals, Downtown Las Vegas, Midwest & South, and Online segments. It also engages in owning and operating a travel agency. Boyd Gaming Corporation was founded in 1975 and is headquartered in Las Vegas, Nevada.