Contrasting MITCHELLS &BUTLERS (MBPFF) & Cheesecake Factory (CAKE)

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MITCHELLS &BUTLERS (OTCMKTS:MBPFF) and Cheesecake Factory (NASDAQ:CAKE) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Volatility and Risk

MITCHELLS &BUTLERS has a beta of 0.2, suggesting that its share price is 80% less volatile than the S&P 500. Comparatively, Cheesecake Factory has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500.

Profitability

This table compares MITCHELLS &BUTLERS and Cheesecake Factory’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MITCHELLS &BUTLERS N/A N/A N/A
Cheesecake Factory 4.21% 18.78% 8.61%

Dividends

Cheesecake Factory pays an annual dividend of $1.32 per share and has a dividend yield of 2.8%. MITCHELLS &BUTLERS does not pay a dividend. Cheesecake Factory pays out 54.3% of its earnings in the form of a dividend. Cheesecake Factory has increased its dividend for 6 consecutive years.

Institutional & Insider Ownership

98.3% of Cheesecake Factory shares are owned by institutional investors. 8.8% of Cheesecake Factory 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 and Valuation

This table compares MITCHELLS &BUTLERS and Cheesecake Factory’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MITCHELLS &BUTLERS $2.97 billion 0.49 N/A N/A N/A
Cheesecake Factory $2.33 billion 0.91 $99.04 million $2.43 19.35

Cheesecake Factory has lower revenue, but higher earnings than MITCHELLS &BUTLERS.

Analyst Recommendations

This is a summary of recent recommendations and price targets for MITCHELLS &BUTLERS and Cheesecake Factory, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MITCHELLS &BUTLERS 0 0 0 0 N/A
Cheesecake Factory 1 10 2 0 2.08

Cheesecake Factory has a consensus target price of $52.00, suggesting a potential upside of 10.57%. Given Cheesecake Factory’s higher possible upside, analysts plainly believe Cheesecake Factory is more favorable than MITCHELLS &BUTLERS.

Summary

Cheesecake Factory beats MITCHELLS &BUTLERS on 11 of the 13 factors compared between the two stocks.

About MITCHELLS &BUTLERS

Mitchells & Butlers plc operates managed restaurants and pubs in the United Kingdom and Germany. The company operates its restaurants and pubs under the Sizzling Pubs, Vintage Inns, Harvester, Ember Inns, Toby Carvery, Crown Carveries, Castle, Nicholson's, O'Neill's, Alex, All Bar One, Miller & Carter, Browns, Innkeeper's Lodge, Oak Tree, Stonehouse, and Premium Country Pubs brand names. It is also involved in the leisure retailing, property management, property development, and financing activities. In addition, it owns various trademarks; and provides gift cards. It operates 1,768 managed businesses and 57 franchised businesses. Mitchells & Butlers plc was founded in 1898 and is based in Birmingham, the United Kingdom.

About Cheesecake Factory

The Cheesecake Factory Incorporated operates restaurants in the United States. The company produces cheesecakes and other baked products for own restaurants and international licensees, as well as external foodservice operators, retailers, and distributors. As of November 20, 2018, it operated 217 company-owned restaurants, including 201 restaurants under The Cheesecake Factory brand; 14 restaurants under the Grand Lux Cafe brand; and 2 restaurants under the RockSugar Southeast Asian Kitchen brand, as well as 21 The Cheesecake Factory branded restaurants under licensing agreements internationally. The company was founded in 1972 and is headquartered in Calabasas, California.

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