Analyzing Brinker International (NYSE:EAT) and Sweetgreen (NYSE:SG)

Brinker International (NYSE:EAT) and Sweetgreen (NYSE:SG) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Brinker International and Sweetgreen, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brinker International	3	8	3	1	2.13
Sweetgreen	0	5	4	0	2.44

Brinker International presently has a consensus target price of $37.20, suggesting a potential upside of 13.76%. Sweetgreen has a consensus target price of $14.44, suggesting a potential upside of 41.75%. Given Sweetgreen’s stronger consensus rating and higher probable upside, analysts clearly believe Sweetgreen is more favorable than Brinker International.

Risk & Volatility

Brinker International has a beta of 2.35, indicating that its share price is 135% more volatile than the S&P 500. Comparatively, Sweetgreen has a beta of 2.04, indicating that its share price is 104% more volatile than the S&P 500.

Insider & Institutional Ownership

79.2% of Sweetgreen shares are owned by institutional investors. 2.4% of Brinker International shares are owned by insiders. Comparatively, 22.0% of Sweetgreen shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Brinker International and Sweetgreen’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brinker International	$4.13 billion	0.35	$102.60 million	$2.24	14.60
Sweetgreen	$520.18 million	2.19	-$190.44 million	($1.41)	-7.23

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

Profitability

This table compares Brinker International and Sweetgreen’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Brinker International	2.48%	-55.47%	5.11%
Sweetgreen	-30.29%	-26.30%	-16.73%

Summary

Brinker International beats Sweetgreen on 8 of the 15 factors compared between the two stocks.

About Brinker International

Brinker International, Inc., together with its subsidiaries, engages in the ownership, development, operation, and franchising of casual dining restaurants in the United States and internationally. It operates and franchises Chili's Grill & Bar and Maggiano's Little Italy restaurant brands. The company also operates virtual brands, It's Just Wings. Brinker International, Inc. was founded in 1975 and is headquartered in Dallas, Texas.

About Sweetgreen

Sweetgreen, Inc., together with its subsidiaries, develops and operates fast-casual restaurants serving healthy foods prepared from seasonal and organic ingredients. The company also accepts orders through its online and mobile ordering platforms, as well as sells gift cards that can be redeemed in its restaurants. The company was founded in 2006 and is headquartered in Los Angeles, California.