Critical Comparison: Starbucks Corporation (SBUX) and Zoe’s Kitchen (ZOES)
Starbucks Corporation (NASDAQ: SBUX) and Zoe’s Kitchen (NYSE:ZOES) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, valuation, risk and analyst recommendations.
Volatility & Risk
Starbucks Corporation has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Zoe’s Kitchen has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500.
Starbucks Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 1.8%. Zoe’s Kitchen does not pay a dividend. Starbucks Corporation pays out 50.8% of its earnings in the form of a dividend.
This is a summary of recent ratings and price targets for Starbucks Corporation and Zoe’s Kitchen, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Starbucks Corporation currently has a consensus target price of $64.36, indicating a potential upside of 16.83%. Zoe’s Kitchen has a consensus target price of $17.55, indicating a potential upside of 40.51%. Given Zoe’s Kitchen’s higher probable upside, analysts clearly believe Zoe’s Kitchen is more favorable than Starbucks Corporation.
Insider & Institutional Ownership
70.8% of Starbucks Corporation shares are held by institutional investors. 3.4% of Starbucks Corporation shares are held by company insiders. Comparatively, 3.0% of Zoe’s Kitchen shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This table compares Starbucks Corporation and Zoe’s Kitchen’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares Starbucks Corporation and Zoe’s Kitchen’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Starbucks Corporation||$22.40 billion||3.55||$5.14 billion||$1.97||27.96|
|Zoe’s Kitchen||$294.14 million||0.83||$22.57 million||($0.02)||-624.50|
Starbucks Corporation has higher revenue and earnings than Zoe’s Kitchen. Zoe’s Kitchen is trading at a lower price-to-earnings ratio than Starbucks Corporation, indicating that it is currently the more affordable of the two stocks.
Starbucks Corporation beats Zoe’s Kitchen on 14 of the 16 factors compared between the two stocks.
Starbucks Corporation Company Profile
Starbucks Corporation (Starbucks) is a roaster, marketer and retailer of coffee. As of October 2, 2016, the Company operated in 75 countries. The Company operates through four segments: Americas, which is inclusive of the United States, Canada, and Latin America; China/Asia Pacific (CAP); Europe, Middle East, and Africa (EMEA), and Channel Development. The Company’s Americas, CAP, and EMEA segments include both company-operated and licensed stores. Its Channel Development segment includes roasted whole bean and ground coffees, Tazo teas, Starbucks- and Tazo-branded single-serve products, a range of ready-to-drink beverages, such as Frappuccino, Starbucks Doubleshot and Starbucks Refreshers beverages and other branded products sold across the world through channels, such as grocery stores, warehouse clubs, specialty retailers, convenience stores and the United States foodservice accounts.
Zoe’s Kitchen Company Profile
Zoe’s Kitchen, Inc. develops and operates fast-casual restaurants serving a menu of fresh, wholesome, Mediterranean-inspired dishes delivered with Southern hospitality. The Company’s menu offers meals made from scratch using produce, proteins and other ingredients, including its appetizers, soups, salads and kabobs. Its food, including both hot and cold items, is suited for catering to a range of business and social occasions. It caters to a range of dietary needs by offering vegetarian, vegan, gluten-free and its calorie conscious, Simply 500 menu selections. Its party packs serve groups of approximately 10 and are each filled with their own combination of fresh fruits, veggies, proteins and grains. The Company serves dishes for various occasions, such as Guilt-Free Girls Night, Game Day Goodies, Shower Sensations and Kids’ Party Pack. As of December 26, 2016, it had operated 201 Company-owned restaurants and three franchise restaurants in 20 states across the United States.
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