Critical Review: Brinker International (NYSE:EAT) vs. Compass Group (OTCMKTS:CMPGY)

Brinker International (NYSE:EAT) and Compass Group (OTCMKTS:CMPGY) are both retail/wholesale companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, institutional ownership, earnings, risk and valuation.

Analyst Recommendations

This is a breakdown of current ratings for Brinker International and Compass Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brinker International	0	4	13	1	2.83
Compass Group	0	0	2	2	3.50

Brinker International currently has a consensus target price of $188.56, indicating a potential upside of 24.67%. Given Brinker International’s higher possible upside, equities analysts clearly believe Brinker International is more favorable than Compass Group.

Volatility and Risk

Brinker International has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, Compass Group has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Brinker International	7.98%	134.92%	17.04%
Compass Group	N/A	N/A	N/A

Earnings and Valuation

This table compares Brinker International and Compass Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brinker International	$5.38 billion	1.22	$383.10 million	$9.89	15.29
Compass Group	$46.07 billion	1.13	$1.87 billion	N/A	N/A

Compass Group has higher revenue and earnings than Brinker International.

Institutional & Insider Ownership

0.0% of Compass Group shares are held by institutional investors. 1.4% of Brinker International shares are held by company insiders. Comparatively, 0.0% of Compass Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Brinker International beats Compass Group on 8 of the 13 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 Compass Group

Compass Group PLC operates as a food and support services company in North America, Europe, and internationally. The company offers support services, such as cleaning in hospitals; reception services at corporate headquarters; managing remote camps; grounds and facilities services at schools and universities; and others. It serves business and industry; healthcare and senior living market; education; sports and leisure; and defense, offshore, and remote sectors. Compass Group PLC was founded in 1941 and is based in Chertsey, the United Kingdom.