Starbucks (NASDAQ:SBUX – Get Free Report) and FAT Brands (NASDAQ:FATBB – Get Free Report) are both retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.
Volatility and Risk
Starbucks has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, FAT Brands has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent recommendations for Starbucks and FAT Brands, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Starbucks | 3 | 10 | 15 | 1 | 2.48 |
| FAT Brands | 1 | 0 | 0 | 0 | 1.00 |
Institutional & Insider Ownership
72.3% of Starbucks shares are owned by institutional investors. 0.1% of Starbucks shares are owned by insiders. Comparatively, 59.9% of FAT Brands shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares Starbucks and FAT Brands”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Starbucks | $37.18 billion | 2.57 | $1.86 billion | $1.64 | 51.20 |
| FAT Brands | $592.65 million | 0.04 | -$189.85 million | ($13.35) | -0.10 |
Starbucks has higher revenue and earnings than FAT Brands. FAT Brands is trading at a lower price-to-earnings ratio than Starbucks, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Starbucks and FAT Brands’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Starbucks | 4.99% | -31.32% | 7.48% |
| FAT Brands | -39.33% | N/A | -17.57% |
Summary
Starbucks beats FAT Brands on 12 of the 15 factors compared between the two stocks.
About Starbucks
Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of coffee worldwide. The company operates through three segments: North America, International, and Channel Development. Its stores offer coffee and tea beverages, roasted whole beans and ground coffees, single serve products, and ready-to-drink beverages; and various food products, such as pastries, breakfast sandwiches, and lunch items. The company also licenses its trademarks through licensed stores, and grocery and foodservice accounts. The company offers its products under the Starbucks Coffee, Teavana, Seattle’s Best Coffee, Ethos, Starbucks Reserve, and Princi brands. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.
About FAT Brands
FAT Brands Inc., a multi-brand restaurant franchising company, acquires, develops, markets, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts worldwide. It owns restaurant brands, including Round Table Pizza, Marble Slab Creamery, Great American Cookies, Hot Dog on a Stick, Pretzelmaker, Fazoli's, Fatburger, Johnny Rockets, Elevation Burger, Yalla Mediterranean, Buffalo's Cafe and Buffalo's Express, Hurricane Grill & Wings, Ponderosa Steakhouse/Bonanza Steakhouse, Native Grill & Wings, Smokey Bones, and Twin Peaks. The company was incorporated in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. is a subsidiary of Fog Cutter Holdings, LLC.
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