Fogo de Chao (NASDAQ: FOGO) and Chipotle Mexican Grill (NYSE:CMG) are both retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.
This is a breakdown of current recommendations for Fogo de Chao and Chipotle Mexican Grill, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Fogo de Chao||0||3||3||0||2.50|
|Chipotle Mexican Grill||6||20||10||0||2.11|
Fogo de Chao presently has a consensus target price of $16.42, indicating a potential upside of 26.28%. Chipotle Mexican Grill has a consensus target price of $402.10, indicating a potential upside of 29.19%. Given Chipotle Mexican Grill’s higher probable upside, analysts plainly believe Chipotle Mexican Grill is more favorable than Fogo de Chao.
This table compares Fogo de Chao and Chipotle Mexican Grill’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Fogo de Chao||7.40%||8.08%||4.58%|
|Chipotle Mexican Grill||3.17%||10.65%||7.38%|
Insider & Institutional Ownership
75.4% of Fogo de Chao shares are held by institutional investors. Comparatively, 98.4% of Chipotle Mexican Grill shares are held by institutional investors. 82.8% of Fogo de Chao shares are held by insiders. Comparatively, 2.0% of Chipotle Mexican Grill shares are held 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.
Earnings & Valuation
This table compares Fogo de Chao and Chipotle Mexican Grill’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Fogo de Chao||$304.00 million||1.21||$52.73 million||$0.79||16.46|
|Chipotle Mexican Grill||$4.31 billion||2.06||$397.78 million||$4.74||65.66|
Chipotle Mexican Grill has higher revenue and earnings than Fogo de Chao. Fogo de Chao is trading at a lower price-to-earnings ratio than Chipotle Mexican Grill, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Fogo de Chao has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500. Comparatively, Chipotle Mexican Grill has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.
Chipotle Mexican Grill beats Fogo de Chao on 11 of the 14 factors compared between the two stocks.
About Fogo de Chao
Fogo de Chao, Inc. is a United States-based holding company. The Company, through its subsidiaries, operates upscale Brazilian churrascaria steakhouses under the brand of Fogo de Chao. The Company owns 100% of Brasa (Purchaser) Inc. (Brasa Purchaser), which owns 100% of Brasa (Holdings) Inc. (Brasa Holdings). The Company operates through two segments: United States and Brazil. It specializes in fire-roasting meats utilizing the centuries-old Southern Brazilian cooking technique of churrasco. The Company offers its guests a tasting menu of meats featuring up to 20 cuts, simply seasoned and fire-roasted to expose their natural flavors. The Company operates approximately 26 restaurants in the United States, 10 in Brazil and one in Mexico. The Company operates a range of restaurant formats, including in-line and free-standing locations. Its restaurants range in size from approximately 7,000 to 16,000 square feet, with seating from 200 to 500 guests.
About Chipotle Mexican Grill
Chipotle Mexican Grill, Inc. (Chipotle), together with its subsidiaries, operates Chipotle Mexican Grill restaurants. The Company’s Chipotle Mexican Grill restaurants serve a menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. As of December 31, 2016, the Company managed its operations and restaurants based on 11 regions. As of December 31, 2016, the Company operated 2,198 Chipotle restaurants throughout the United States, as well as 29 international Chipotle restaurants, and it also had 23 restaurants in operation in other non-Chipotle concepts. As of December 31, 2016, 29 of its restaurants were located outside of the United States, with 17 in Canada, six in the United Kingdom, five in France and one in Frankfurt, Germany. The Company sells gift cards, which do not have an expiration date. The Company categorizes its restaurants as end-caps (at the end of a line of retail outlets), in-lines (in a line of retail outlets), free-standing or other.
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