Shake Shack (NYSE:SHAK) and Giggles N Hugs (OTCMKTS:GIGL) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Institutional and Insider Ownership

82.4% of Shake Shack shares are owned by institutional investors. 30.2% of Shake Shack shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Shake Shack and Giggles N Hugs’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shake Shack 0.40% 10.64% 5.00%
Giggles N Hugs -35.15% N/A -103.44%

Analyst Recommendations

This is a summary of current recommendations and price targets for Shake Shack and Giggles N Hugs, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shake Shack 2 5 3 0 2.10
Giggles N Hugs 0 0 0 0 N/A

Shake Shack currently has a consensus price target of $54.67, suggesting a potential upside of 10.50%. Given Shake Shack’s higher possible upside, equities analysts clearly believe Shake Shack is more favorable than Giggles N Hugs.

Earnings & Valuation

This table compares Shake Shack and Giggles N Hugs’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Shake Shack $358.81 million 5.11 -$320,000.00 $0.57 86.79
Giggles N Hugs $2.45 million 0.61 -$1.62 million N/A N/A

Shake Shack has higher revenue and earnings than Giggles N Hugs.

Volatility and Risk

Shake Shack has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500. Comparatively, Giggles N Hugs has a beta of 7.58, suggesting that its stock price is 658% more volatile than the S&P 500.

Summary

Shake Shack beats Giggles N Hugs on 10 of the 11 factors compared between the two stocks.

About Shake Shack

Shake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. Its Shacks offers hamburgers, hot dogs, chicken, crinkle cut fries, shakes, frozen custard, beer, wine, and other products. As of October 9, 2018, it operated 180 locations in 26 U.S. States and the District of Columbia, including approximately 70 locations across London, Hong Kong, Istanbul, Dubai, Tokyo, Moscow, Seoul, and internationally. Shake Shack Inc. was founded in 2004 and is headquartered in New York, New York.

About Giggles N Hugs

Giggles N' Hugs, Inc. owns and operates kid-friendly restaurants with play areas for children in 10 years and younger in California. It owns and operates a restaurant in the Westfield Topanga shopping center in Woodland Hills; and a restaurant in the Glendale Galleria in Glendale, California. The company was formerly known as Teacher's Pet, Inc. and changed its name to Giggles N' Hugs, Inc. in August 2010. Giggles N' Hugs, Inc. was founded in 2004 and is headquartered in Glendale, California.

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