Extended Stay America (NYSE: STAY) and Bravo Brio Restaurant Group (NASDAQ:BBRG) are both cyclical consumer goods & services companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, institutional ownership, earnings, valuation, risk and analyst recommendations.
This table compares Extended Stay America and Bravo Brio Restaurant Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Extended Stay America||5.83%||14.53%||4.74%|
|Bravo Brio Restaurant Group||-18.32%||-16.41%||2.12%|
Insider & Institutional Ownership
98.5% of Extended Stay America shares are held by institutional investors. Comparatively, 35.5% of Bravo Brio Restaurant Group shares are held by institutional investors. 0.6% of Extended Stay America shares are held by company insiders. Comparatively, 6.0% of Bravo Brio Restaurant Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Extended Stay America pays an annual dividend of $0.84 per share and has a dividend yield of 4.5%. Bravo Brio Restaurant Group does not pay a dividend. Extended Stay America pays out 215.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bravo Brio Restaurant Group has raised its dividend for 2 consecutive years.
Risk & Volatility
Extended Stay America has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500. Comparatively, Bravo Brio Restaurant Group has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.
This is a summary of recent ratings for Extended Stay America and Bravo Brio Restaurant Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Extended Stay America||0||1||7||0||2.88|
|Bravo Brio Restaurant Group||1||1||0||0||1.50|
Extended Stay America presently has a consensus price target of $20.81, indicating a potential upside of 12.56%. Bravo Brio Restaurant Group has a consensus price target of $2.25, indicating a potential downside of 10.00%. Given Extended Stay America’s stronger consensus rating and higher probable upside, research analysts clearly believe Extended Stay America is more favorable than Bravo Brio Restaurant Group.
Earnings and Valuation
This table compares Extended Stay America and Bravo Brio Restaurant Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Extended Stay America||$1.27 billion||2.80||$69.93 million||$0.39||47.41|
|Bravo Brio Restaurant Group||$410.25 million||0.09||-$74.71 million||($4.95)||-0.51|
Extended Stay America has higher revenue and earnings than Bravo Brio Restaurant Group. Bravo Brio Restaurant Group is trading at a lower price-to-earnings ratio than Extended Stay America, indicating that it is currently the more affordable of the two stocks.
Extended Stay America beats Bravo Brio Restaurant Group on 14 of the 17 factors compared between the two stocks.
About Extended Stay America
Extended Stay America, Inc. is a owner/operator of company-branded hotels in North America. The Company operates in the extended stay lodging industry. The Company owns and operates approximately 700 hotel properties consisting of approximately 75,900 rooms located in 44 states across the United States of America and in Canada. The Company owns and operates hotels under the core brand, Extended Stay America. In addition, the Company owns and operates three Extended Stay Canada hotels, 49 hotels in the economy extended stay segment under the Crossland Economy Studios and Hometown Inn brands, and also manage two Extended Stay America hotels.
About Bravo Brio Restaurant Group
Bravo Brio Restaurant Group, Inc. is the owner and operator of approximately two Italian restaurant brands, including BRAVO! Cucina Italiana (BRAVO!) and BRIO Tuscan Grille (BRIO). The Company operates approximately 120 restaurants in over 30 states. Additionally, approximately one BRIO restaurant is operated under a franchise agreement. It has over 110 operating locations, owns approximately four locations, of which over 100 are located adjacent to or in lifestyle centers and shopping malls, and over 10 are free-standing units. Its reward programs, called MyBRAVO Rewards and MyBRIO Rewards, are designed to reward guests for their continuous dining at its restaurants. Its guests can download a MyBRAVO/MyBRIO! Rewards mobile application, register their cards at BRAVO! and BRIO locations or online at www.myBRAVOReward.com or www.myBRIOReward.com. It also operates approximately one full-service American-French bistro restaurant in Columbus, Ohio under the brand Bon Vie.
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