Aramark (NYSE: ARMK) and Chanticleer (NASDAQ:BURG) are both cyclical consumer goods & services companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, risk and valuation.

Institutional and Insider Ownership

93.3% of Aramark shares are held by institutional investors. 2.9% of Aramark shares are held by company insiders. Comparatively, 2.5% of Chanticleer shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Aramark and Chanticleer, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aramark 0 2 3 1 2.83
Chanticleer 0 0 0 0 N/A

Aramark currently has a consensus price target of $44.83, indicating a potential upside of 8.50%. Given Aramark’s higher possible upside, equities research analysts clearly believe Aramark is more favorable than Chanticleer.

Risk and Volatility

Aramark has a beta of 0.5, indicating that its share price is 50% less volatile than the S&P 500. Comparatively, Chanticleer has a beta of 1.98, indicating that its share price is 98% more volatile than the S&P 500.

Profitability

This table compares Aramark and Chanticleer’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aramark 2.56% 19.69% 4.25%
Chanticleer -15.66% -48.28% -19.80%

Earnings and Valuation

This table compares Aramark and Chanticleer’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Aramark $14.60 billion 0.69 $373.92 million $1.48 27.92
Chanticleer $41.70 million 0.18 -$9.07 million ($2.88) -0.85

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

Dividends

Aramark pays an annual dividend of $0.41 per share and has a dividend yield of 1.0%. Chanticleer does not pay a dividend. Aramark pays out 27.7% of its earnings in the form of a dividend. Aramark has increased its dividend for 2 consecutive years.

Summary

Aramark beats Chanticleer on 14 of the 16 factors compared between the two stocks.

About Aramark

Aramark is a global provider of food, facilities and uniform services to education, healthcare, business and industry, and sports, leisure and corrections clients. The Company operates through three segments: Food and Support Services North America (FSS North America), Food and Support Services International (FSS International), and Uniform and Career Apparel (Uniform). FSS North America and FSS International segments include food, refreshment, specialized dietary and support services, including facility maintenance and housekeeping, provided to business, educational and healthcare institutions and in sports, leisure and other facilities. The Uniform segment includes rental, sale, cleaning, maintenance and delivery of personalized uniforms and other textile items to clients in a range of industries in the United States, Puerto Rico, Japan and Canada, including manufacturing, transportation, construction, restaurants and hotels, healthcare and pharmaceutical industries.

About Chanticleer

Chanticleer Holdings, Inc. is engaged in the business of owning, operating and franchising fast casual dining concepts domestically and internationally. The Company’s brands include Hooters, American Burger Company (ABC), BGR: the Burger Joint (BGR), BT’s Burger Joint (BT), Little Big Burger (LBB) and Just Fresh. Hooters restaurants are casual beach-themed establishments featuring music, sports on large flat screens, and a menu that includes seafood, burgers, salads and Hooters original chicken wings. ABC is a fast casual dining chain located in North Carolina, South Carolina and New York. BGR consists of approximately 10 Company-owned locations in the United States and over 13 franchisee-operated locations in the United States and the Middle East. LBB consists of approximately eight locations in Oregon. Just Fresh consists of approximately seven Company owned locations in Charlotte, North Carolina.

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