Contrasting Chuy’s (NASDAQ:CHUY) & BAB (OTCMKTS:BABB)

Chuy’s (NASDAQ:CHUY) and BAB (OTCMKTS:BABB) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitability, institutional ownership, valuation and earnings.

Analyst Ratings

This is a breakdown of current ratings and target prices for Chuy’s and BAB, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chuy’s	0	6	0	0	2.00
BAB	0	0	0	0	N/A

Chuy’s presently has a consensus target price of $33.25, indicating a potential downside of 10.55%. Given Chuy’s’ higher possible upside, equities research analysts clearly believe Chuy’s is more favorable than BAB.

Earnings and Valuation

This table compares Chuy’s and BAB’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chuy’s	$460.07 million	1.39	$31.51 million	$1.69	21.98
BAB	$3.51 million	1.62	$470,000.00	$0.07	11.16

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

Volatility and Risk

Chuy’s has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500. Comparatively, BAB has a beta of 0.07, suggesting that its stock price is 93% less volatile than the S&P 500.

Profitability

This table compares Chuy’s and BAB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chuy’s	6.58%	13.51%	7.13%
BAB	15.23%	17.45%	12.20%

Insider & Institutional Ownership

99.9% of Chuy’s shares are owned by institutional investors. 1.7% of Chuy’s shares are owned by insiders. Comparatively, 33.7% of BAB shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Chuy’s beats BAB on 7 of the 12 factors compared between the two stocks.

About Chuy’s

Chuy's Holdings, Inc., through its subsidiaries, owns and operates full-service restaurants under the Chuy's name in the United States. The company was founded in 1982 and is headquartered in Austin, Texas.

About BAB

BAB, Inc. franchises and licenses bagel and muffin retail units under the Big Apple Bagels (BAB), My Favorite Muffin (MFM), and SweetDuet (SD) trade names in the United States. It's BAB franchised brand includes daily baked bagels, flavored cream cheeses, premium coffees, gourmet bagel sandwiches, and other related products; and MFM brand comprises various freshly baked muffins and coffees, as well as units operating as My Favorite Muffin Your All Day Bakery Café features specialty bagel sandwiches and related products. The company's SD brand includes frozen yogurt products. BAB, Inc. was founded in 1993 and is based in Deerfield, Illinois.