Kona Grill (NASDAQ: KONA) and Starbucks Corporation (NASDAQ:SBUX) are both retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, earnings, institutional ownership, analyst recommendations, risk and profitabiliy.

Valuation & Earnings

This table compares Kona Grill and Starbucks Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kona Grill $175.47 million 0.12 $4.96 million ($2.58) -0.81
Starbucks Corporation $22.40 billion 3.46 $5.14 billion $1.97 27.28

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

Institutional & Insider Ownership

58.7% of Kona Grill shares are held by institutional investors. Comparatively, 69.9% of Starbucks Corporation shares are held by institutional investors. 29.2% of Kona Grill shares are held by insiders. Comparatively, 3.4% of Starbucks Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Kona Grill and Starbucks Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kona Grill -14.98% -39.42% -11.31%
Starbucks Corporation 12.93% 52.82% 21.42%

Analyst Recommendations

This is a summary of recent recommendations for Kona Grill and Starbucks Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kona Grill 0 2 3 0 2.60
Starbucks Corporation 0 10 19 2 2.74

Kona Grill currently has a consensus price target of $6.67, indicating a potential upside of 217.46%. Starbucks Corporation has a consensus price target of $64.70, indicating a potential upside of 20.39%. Given Kona Grill’s higher possible upside, research analysts plainly believe Kona Grill is more favorable than Starbucks Corporation.

Dividends

Starbucks Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Kona Grill does not pay a dividend. Starbucks Corporation pays out 50.8% of its earnings in the form of a dividend.

Volatility & Risk

Kona Grill has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500. Comparatively, Starbucks Corporation has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.

Summary

Starbucks Corporation beats Kona Grill on 13 of the 16 factors compared between the two stocks.

Kona Grill Company Profile

Kona Grill, Inc. owns and operates upscale casual dining restaurants under the name Kona Grill. The Company owns and operates approximately 40 restaurants in 20 states throughout the United States and Puerto Rico. Its high-volume upscale casual restaurants feature a global menu of contemporary American favorites and sushi. Its menu items are prepared from scratch at each restaurant location and incorporate over 40 signature sauces and dressings. It also offers a full service bar offering a range assortment of wines, specialty cocktails and beers. Its restaurants seat an average of approximately 290 customers and comprise multiple dining areas. Its dining area, full-service bar, indoor/outdoor patio and sushi bar provide a choice of atmospheres and a range of environments. It locates its restaurants in various areas, such as retail centers, shopping malls, urban entertainment districts and lifestyle centers that are situated near commercial office space and residential housing.

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.

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