Head-To-Head Comparison: Starbucks (SBUX) vs. J D Wetherspoon (JDWPY)

Starbucks (NASDAQ:SBUX) and J D Wetherspoon (OTCMKTS:JDWPY) are both retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Insider & Institutional Ownership

76.1% of Starbucks shares are owned by institutional investors. 3.4% of Starbucks shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Starbucks and J D Wetherspoon’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Starbucks $24.72 billion 3.33 $4.52 billion $2.42 27.39
J D Wetherspoon $2.28 billion 0.69 $89.95 million N/A N/A

Starbucks has higher revenue and earnings than J D Wetherspoon.

Dividends

Starbucks pays an annual dividend of $1.44 per share and has a dividend yield of 2.2%. J D Wetherspoon pays an annual dividend of $0.98 per share and has a dividend yield of 1.4%. Starbucks pays out 59.5% of its earnings in the form of a dividend. Starbucks has increased its dividend for 7 consecutive years. Starbucks is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and target prices for Starbucks and J D Wetherspoon, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Starbucks 2 11 15 0 2.46
J D Wetherspoon 2 0 1 0 1.67

Starbucks presently has a consensus price target of $65.54, indicating a potential downside of 1.12%. Given Starbucks’ stronger consensus rating and higher probable upside, equities analysts clearly believe Starbucks is more favorable than J D Wetherspoon.

Profitability

This table compares Starbucks and J D Wetherspoon’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Starbucks 18.28% 86.33% 17.45%
J D Wetherspoon N/A N/A N/A

Volatility & Risk

Starbucks has a beta of 0.52, suggesting that its share price is 48% less volatile than the S&P 500. Comparatively, J D Wetherspoon has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500.

Summary

Starbucks beats J D Wetherspoon on 14 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 specialty coffee worldwide. The company operates in four segments: Americas; China/Asia Pacific; Europe, Middle East, and Africa; and Channel Development. Its stores offer coffee and tea beverages, roasted whole bean and ground coffees, single-serve and ready-to-drink coffee and tea products, and food and snacks; 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. It offers its products under the Starbucks, Teavana, Tazo, Seattle's Best Coffee, Evolution Fresh, La Boulange, Ethos, Frappuccino, Starbucks Doubleshot, Starbucks Refreshers, premium Tazo, and Starbucks VIA brand names. As of July 26, 2018, the company operated 28,720 stores. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.

About J D Wetherspoon

J D Wetherspoon plc owns and operates pubs and hotels in the United Kingdom and the Republic of Ireland. As of July 24, 2017, it operated 895 pubs. The company was founded in 1979 and is headquartered in Watford, the United Kingdom.

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