Financial Survey: Dutch Bros (NYSE:BROS) versus Wingstop (NASDAQ:WING)
by Danessa Lincoln · The Markets DailyWingstop (NASDAQ:WING – Get Free Report) and Dutch Bros (NYSE:BROS – Get Free Report) are both mid-cap retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.
Profitability
This table compares Wingstop and Dutch Bros’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Wingstop | 25.01% | -16.12% | 16.24% |
| Dutch Bros | 4.87% | 9.56% | 2.82% |
Analyst Recommendations
This is a summary of recent recommendations for Wingstop and Dutch Bros, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Wingstop | 1 | 5 | 26 | 3 | 2.89 |
| Dutch Bros | 0 | 3 | 20 | 1 | 2.92 |
Wingstop currently has a consensus target price of $320.24, suggesting a potential upside of 109.98%. Dutch Bros has a consensus target price of $75.95, suggesting a potential upside of 50.95%. Given Wingstop’s higher probable upside, equities research analysts clearly believe Wingstop is more favorable than Dutch Bros.
Institutional and Insider Ownership
85.5% of Dutch Bros shares are held by institutional investors. 0.7% of Wingstop shares are held by insiders. Comparatively, 42.4% of Dutch Bros shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Wingstop and Dutch Bros”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Wingstop | $696.85 million | 5.98 | $174.27 million | $6.18 | 24.68 |
| Dutch Bros | $1.64 billion | 5.05 | $79.84 million | $0.64 | 78.62 |
Wingstop has higher earnings, but lower revenue than Dutch Bros. Wingstop is trading at a lower price-to-earnings ratio than Dutch Bros, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Wingstop has a beta of 2.03, indicating that its stock price is 103% more volatile than the S&P 500. Comparatively, Dutch Bros has a beta of 2.5, indicating that its stock price is 150% more volatile than the S&P 500.
Summary
Wingstop beats Dutch Bros on 8 of the 15 factors compared between the two stocks.
About Wingstop
Wingstop Inc., together with its subsidiaries, franchises and operates restaurants under the Wingstop brand. Its restaurants offer classic wings, boneless wings, tenders, and hand-sauced-and-tossed in various flavors, as well as chicken sandwiches with fries and hand-cut carrots and celery that are cooked-to-order. The company was founded in 1994 and is headquartered in Addison, Texas.
About Dutch Bros
Dutch Bros Inc., together with its subsidiaries, operates and franchises drive-thru shops in the United States. The company operates through Company-Operated Shops and Franchising and Other segments. It serves through company-operated shops and online channels under Dutch Bros; Dutch Bros Coffee; Dutch Bros Rebel; Dutch Bros; and Blue Rebel brands. Dutch Bros Inc. was founded in 1992 and is headquartered in Grants Pass, Oregon.