Financial Analysis: BJ’s Restaurants (NASDAQ:BJRI) and Domino’s Pizza (NASDAQ:DPZ)

BJ’s Restaurants (NASDAQ:BJRI) and Domino’s Pizza (NASDAQ:DPZ) are both retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, earnings, profitability, dividends, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations and price targets for BJ’s Restaurants and Domino’s Pizza, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BJ’s Restaurants	2	6	2	0	2.00
Domino’s Pizza	2	12	17	0	2.48

BJ’s Restaurants currently has a consensus price target of $41.88, indicating a potential upside of 10.23%. Domino’s Pizza has a consensus price target of $421.35, indicating a potential upside of 26.87%. Given Domino’s Pizza’s stronger consensus rating and higher possible upside, analysts plainly believe Domino’s Pizza is more favorable than BJ’s Restaurants.

Volatility & Risk

BJ’s Restaurants has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, Domino’s Pizza has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Insider & Institutional Ownership

100.0% of BJ’s Restaurants shares are held by institutional investors. Comparatively, 94.6% of Domino’s Pizza shares are held by institutional investors. 4.9% of BJ’s Restaurants shares are held by company insiders. Comparatively, 0.9% of Domino’s Pizza shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares BJ’s Restaurants and Domino’s Pizza’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BJ’s Restaurants	3.49%	13.82%	5.01%
Domino’s Pizza	11.89%	-15.04%	33.66%

Earnings and Valuation

This table compares BJ’s Restaurants and Domino’s Pizza”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BJ’s Restaurants	$1.40 billion	0.57	$48.81 million	$2.15	17.67
Domino’s Pizza	$4.94 billion	2.24	$601.70 million	$17.37	19.12

Domino’s Pizza has higher revenue and earnings than BJ’s Restaurants. BJ’s Restaurants is trading at a lower price-to-earnings ratio than Domino’s Pizza, indicating that it is currently the more affordable of the two stocks.

Summary

Domino’s Pizza beats BJ’s Restaurants on 10 of the 14 factors compared between the two stocks.

About BJ’s Restaurants

BJ’s Restaurants, Inc. owns and operates casual dining restaurants in the United States. Its restaurants offer pizzas, craft and other beers, appetizers, entrées, pastas, sandwiches, specialty salads, and desserts under brand name Pizookie. The company was formerly known as Chicago Pizza & Brewery, Inc. and changed its name to BJ’s Restaurants, Inc. in August 2004. BJ’s Restaurants, Inc. was founded in 1978 and is based in Huntington Beach, California.

About Domino’s Pizza

Domino’s Pizza, Inc., through its subsidiaries, operates as a pizza company in the United States and internationally. The company operates through three segments: U.S. Stores, International Franchise, and Supply Chain. It offers pizzas under the Domino’s brand name through company-owned and franchised stores. It also provides oven-baked sandwiches, pastas, boneless chicken and chicken wings, breads and dips, desserts, and soft drink products, as well as loaded tots and pepperoni stuffed cheesy breads. Domino’s Pizza, Inc. was founded in 1960 and is headquartered in Ann Arbor, Michigan.