Cannae (NYSE: CNNE) and Shake Shack (NYSE:SHAK) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, analyst recommendations, profitability, dividends, institutional ownership and risk.
Valuation and Earnings
This table compares Cannae and Shake Shack’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cannae||$1.17 billion||1.22||$108.80 million||$1.54||13.11|
|Shake Shack||$358.81 million||6.00||-$320,000.00||$0.57||102.47|
Cannae has higher revenue and earnings than Shake Shack. Cannae is trading at a lower price-to-earnings ratio than Shake Shack, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
79.9% of Cannae shares are owned by institutional investors. Comparatively, 85.9% of Shake Shack shares are owned by institutional investors. 4.9% of Cannae shares are owned by company insiders. Comparatively, 30.2% of Shake Shack shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Risk and Volatility
Cannae has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, Shake Shack has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.
This is a summary of current ratings for Cannae and Shake Shack, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Shake Shack has a consensus price target of $47.37, indicating a potential downside of 18.90%. Given Shake Shack’s higher probable upside, analysts plainly believe Shake Shack is more favorable than Cannae.
This table compares Cannae and Shake Shack’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Shake Shack beats Cannae on 9 of the 13 factors compared between the two stocks.
Cannae Company Profile
Cannae Holdings, Inc is a principal investment firm. The firm primarily invests in restaurants, technology enabled healthcare services, financial services and more. It takes both minority and majority stakes. Cannae Holdings, Inc. is based in Las Vegas, Nevada.
Shake Shack Company Profile
Shake Shack Inc. owns, operates, and licenses Shake Shack restaurants (Shacks) in the United States and internationally. Its Shacks offers hamburgers, hot dogs, chicken, crinkle cut fries, shakes, frozen custard, beer, wine, and other products. As of December 27, 2017, it had 159 Shacks, including 90 domestic company-operated Shacks, 10 domestic licensed Shacks, and 59 international licensed Shacks. Shake Shack Inc. was founded in 2004 and is headquartered in New York, New York.
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