Head to Head Survey: Biglari (NYSE:BH.A) versus Cheesecake Factory (NASDAQ:CAKE)

Cheesecake Factory (NASDAQ:CAKE) and Biglari (NYSE:BH.A) are both mid-cap retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, risk, profitability, analyst recommendations and earnings.

Volatility & Risk

Cheesecake Factory has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Biglari has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500.

Profitability

This table compares Cheesecake Factory and Biglari’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cheesecake Factory	4.34%	43.74%	5.81%
Biglari	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent ratings and target prices for Cheesecake Factory and Biglari, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cheesecake Factory	3	9	6	0	2.17
Biglari	0	0	0	0	0.00

Cheesecake Factory presently has a consensus price target of $67.12, suggesting a potential downside of 17.30%. Given Cheesecake Factory’s stronger consensus rating and higher possible upside, research analysts plainly believe Cheesecake Factory is more favorable than Biglari.

Valuation & Earnings

This table compares Cheesecake Factory and Biglari”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cheesecake Factory	$3.75 billion	1.07	$148.43 million	$3.42	23.73
Biglari	$395.26 million	11.29	-$166.62 million	($72.76)	-26.79

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

Insider and Institutional Ownership

94.5% of Cheesecake Factory shares are held by institutional investors. Comparatively, 7.7% of Biglari shares are held by institutional investors. 8.0% of Cheesecake Factory shares are held by company insiders. Comparatively, 70.9% of Biglari shares are held by company 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.

Summary

Cheesecake Factory beats Biglari on 12 of the 14 factors compared between the two stocks.

About Cheesecake Factory

The Cheesecake Factory Incorporated operates and licenses restaurants in the United States and Canada. The company operates bakeries that produce cheesecakes and other baked products for its restaurants, international licensees, third-party bakery customers, external foodservice operators, retailers, and distributors. It operates restaurants under the brands comprising The Cheesecake Factory, North Italia, Flower Child, Fox Restaurant Concepts. The Cheesecake Factory Incorporated was founded in 1972 and is headquartered in Calabasas, California.

About Biglari

Biglari Holdings Inc., through its subsidiaries, primarily operates and franchises restaurants in the United States. The company owns, operates, and franchises restaurants under the Steak n Shake and Western Sizzlin names. As of December 31, 2019, it operated 368 Steak n Shake company-operated restaurants and 213 franchised units; and 4 Western Sizzlin company-operated restaurants and 48 franchised units. The company also engages in underwriting commercial trucking insurance, and selling physical damage and non-trucking liability insurance to truckers; and operates oil and natural gas properties offshore in the Gulf of Mexico. In addition, it publishes and sells magazines, and related publishing products under the MAXIM and Maxim brand name; and licenses media products and services, as well as is involved in the investment activities. The company was formerly known as The Steak n Shake Company and changed its name to Biglari Holdings Inc. in April 2010. Biglari Holdings Inc. was founded in 1934 and is based in San Antonio, Texas.