Aramark (NYSE:ARMK) versus Chipotle Mexican Grill (NYSE:CMG) Head-To-Head Analysis

Aramark (NYSE:ARMK) and Chipotle Mexican Grill (NYSE:CMG) are both consumer staples companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, risk, valuation, earnings, institutional ownership, analyst recommendations and profitability.

Profitability

This table compares Aramark and Chipotle Mexican Grill’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aramark 3.27% 17.31% 3.89%
Chipotle Mexican Grill 4.08% 19.78% 10.11%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Aramark and Chipotle Mexican Grill, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aramark 0 4 8 0 2.67
Chipotle Mexican Grill 6 13 14 0 2.24

Aramark currently has a consensus price target of $40.64, suggesting a potential upside of 19.38%. Chipotle Mexican Grill has a consensus price target of $658.34, suggesting a potential downside of 9.50%. Given Aramark’s stronger consensus rating and higher probable upside, equities analysts clearly believe Aramark is more favorable than Chipotle Mexican Grill.

Valuation & Earnings

This table compares Aramark and Chipotle Mexican Grill’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aramark $15.79 billion 0.53 $567.88 million $1.99 17.11
Chipotle Mexican Grill $4.86 billion 4.14 $176.55 million $9.06 80.30

Aramark has higher revenue and earnings than Chipotle Mexican Grill. Aramark is trading at a lower price-to-earnings ratio than Chipotle Mexican Grill, indicating that it is currently the more affordable of the two stocks.

Dividends

Aramark pays an annual dividend of $0.44 per share and has a dividend yield of 1.3%. Chipotle Mexican Grill does not pay a dividend. Aramark pays out 22.1% of its earnings in the form of a dividend. Aramark has increased its dividend for 4 consecutive years.

Volatility and Risk

Aramark has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, Chipotle Mexican Grill has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Insider and Institutional Ownership

97.3% of Aramark shares are owned by institutional investors. Comparatively, 95.1% of Chipotle Mexican Grill shares are owned by institutional investors. 3.5% of Aramark shares are owned by insiders. Comparatively, 2.2% of Chipotle Mexican Grill shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Aramark beats Chipotle Mexican Grill on 9 of the 17 factors compared between the two stocks.

Aramark Company Profile

Aramark provides food, facilities management, and uniform services to education, healthcare, business and industry, sports, leisure, and corrections clients in North America and internationally. It operates in three segments: Food and Support Services United States, Food and Support Services International, and Uniform and Career Apparel. The company offers managed services, including dining, catering, food service management, and convenience-oriented retail operations; non-clinical support services, such as patient food and nutrition, retail food, and procurement services; and plant operations and maintenance, custodial/housekeeping, energy management, clinical equipment maintenance, grounds keeping, and capital project management services. It also provides on-site restaurants, convenience stores, and executive dining services; beverage and vending services; and facility management services comprising landscaping, transportation, payment, and other facility consulting services relating to building operations. In addition, the company offers concessions, banquet, and catering services; retail services and merchandise sale, recreational, and lodging services; and facility management services at sports, entertainment, and recreational facilities. Additionally, the company offers correctional food, and food and facilities management services for parks; and operates commissaries, laundry facilities, and property rooms. It also provides design, sourcing and manufacturing, delivery, cleaning, maintenance, and marketing services for uniforms and accessories; provides managed restroom services; and rents uniforms, work clothing, outerwear, particulate-free garments, and non-garment items and related services that include mats, shop towels, and first aid supplies. The company was formerly known as ARAMARK Holdings Corporation and changed its name to Aramark in May 2014. Aramark was founded in 1959 and is based in Philadelphia, Pennsylvania.

Chipotle Mexican Grill Company Profile

Chipotle Mexican Grill, Inc., together with its subsidiaries, operates Chipotle Mexican Grill restaurants. As of December 31, 2018, it operated 2,491 restaurants, including 2,452 Chipotle restaurants in the United States, 37 Chipotle restaurants internationally, and two non-Chipotle restaurants. The company was founded in 1993 and is headquartered in Newport Beach, California.

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