Chuy’s Holdings (NASDAQ: CHUY) and Bojangles’ (NASDAQ:BOJA) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, earnings, analyst recommendations, risk and profitability.

Profitability

This table compares Chuy’s Holdings and Bojangles”s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chuy’s Holdings 4.86% 11.16% 7.30%
Bojangles’ 6.70% 17.05% 6.47%

Institutional & Insider Ownership

98.4% of Chuy’s Holdings shares are owned by institutional investors. Comparatively, 91.6% of Bojangles’ shares are owned by institutional investors. 3.3% of Chuy’s Holdings shares are owned by insiders. Comparatively, 55.3% of Bojangles’ shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Chuy’s Holdings has a beta of 0.01, suggesting that its stock price is 99% less volatile than the S&P 500. Comparatively, Bojangles’ has a beta of 1.98, suggesting that its stock price is 98% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Chuy’s Holdings and Bojangles’, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chuy’s Holdings 0 7 2 0 2.22
Bojangles’ 0 5 3 2 2.70

Chuy’s Holdings presently has a consensus target price of $27.88, suggesting a potential upside of 35.32%. Bojangles’ has a consensus target price of $19.50, suggesting a potential upside of 44.98%. Given Bojangles”s stronger consensus rating and higher probable upside, analysts plainly believe Bojangles’ is more favorable than Chuy’s Holdings.

Valuation & Earnings

This table compares Chuy’s Holdings and Bojangles”s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Chuy’s Holdings $346.03 million 1.01 $41.16 million $0.99 20.81
Bojangles’ $538.50 million 0.92 $79.81 million $0.95 14.16

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

Summary

Bojangles’ beats Chuy’s Holdings on 10 of the 15 factors compared between the two stocks.

Chuy’s Holdings Company Profile

Chuy’s Holdings, Inc. operates Chuy’s, a restaurant concept offering a distinct menu of authentic, freshly prepared Mexican and Tex-Mex inspired food. As of December 25, 2016, the Company operated 80 Chuy’s restaurants across 16 states. The Company offers the same menu during lunch and dinner, which includes enchiladas, fajitas, tacos, burritos, combination platters and daily specials, complemented by a range of appetizers, soups and salads. Each of the Company’s restaurants offers a range of homemade sauces, including the signature Hatch green chile and creamy jalapeno sauces. The Company also offers a full-service bar in all of its restaurants providing its customers a range of beverage offerings, featuring a selection of specialty cocktails including its signature on-the-rocks margaritas made with fresh, hand-squeezed lime juice, and the Texas Martini, a made-to-order, hand-shaken cocktail served with jalapeno-stuffed olives.

Bojangles’ Company Profile

Bojangles’, Inc. is a restaurant operator and franchisor. The Company offers food made from its Southern recipes. The Company’s menu includes its made-from-scratch, buttermilk biscuits baked fresh every 20 minutes; its fresh, never-frozen bone-in fried chicken; its fixin’s; its Bo-Smart menu featuring items, such as salads, grilled chicken sandwiches, roasted chicken bites and fat-free green beans; its freshly baked and delicious sweets menu, and its Legendary Iced Tea. The Company’s food is offered a la carte and in combos. The Company’s chicken, fixin’s, biscuits and Legendary Iced Tea may also be ordered in boxes or family meals, and larger combinations may be offered as tailgate specials or may be packaged in its Big Bo Box. The Company offers Southern style mac ‘n cheese made from two cheeses; fat-free green beans; cole slaw, and mashed potatoes with gravy. Its menu also features salads, sandwiches and its whole meat Roasted Chicken Bites.

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