FAT Brands (FAT) vs. Ruth’s Hospitality Group (RUTH) Head-To-Head Comparison

FAT Brands (NASDAQ:FAT) and Ruth’s Hospitality Group (NASDAQ:RUTH) are both small-cap retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, risk, analyst recommendations, valuation, institutional ownership and profitability.

Earnings & Valuation

This table compares FAT Brands and Ruth’s Hospitality Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FAT Brands $18.37 million 3.48 -$1.80 million N/A N/A
Ruth’s Hospitality Group $452.33 million 1.69 $41.68 million $1.39 18.16

Ruth’s Hospitality Group has higher revenue and earnings than FAT Brands.

Analyst Recommendations

This is a summary of recent ratings and target prices for FAT Brands and Ruth’s Hospitality Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FAT Brands 0 0 1 0 3.00
Ruth’s Hospitality Group 0 2 0 0 2.00

FAT Brands currently has a consensus target price of $12.00, indicating a potential upside of 121.40%. Ruth’s Hospitality Group has a consensus target price of $28.00, indicating a potential upside of 10.94%. Given FAT Brands’ stronger consensus rating and higher probable upside, equities analysts clearly believe FAT Brands is more favorable than Ruth’s Hospitality Group.

Dividends

FAT Brands pays an annual dividend of $0.48 per share and has a dividend yield of 8.9%. Ruth’s Hospitality Group pays an annual dividend of $0.52 per share and has a dividend yield of 2.1%. Ruth’s Hospitality Group pays out 37.4% of its earnings in the form of a dividend. Ruth’s Hospitality Group has increased its dividend for 5 consecutive years.

Profitability

This table compares FAT Brands and Ruth’s Hospitality Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FAT Brands -9.79% -39.00% -4.65%
Ruth’s Hospitality Group 9.21% 47.40% 17.53%

Risk & Volatility

FAT Brands has a beta of 1.61, meaning that its share price is 61% more volatile than the S&P 500. Comparatively, Ruth’s Hospitality Group has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.

Institutional & Insider Ownership

1.5% of FAT Brands shares are owned by institutional investors. Comparatively, 84.7% of Ruth’s Hospitality Group shares are owned by institutional investors. 1.3% of FAT Brands shares are owned by insiders. Comparatively, 7.5% of Ruth’s Hospitality Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Ruth’s Hospitality Group beats FAT Brands on 8 of the 15 factors compared between the two stocks.

FAT Brands Company Profile

FAT Brands Inc., a multi-brand franchising company, acquires, markets, and develops fast casual and casual dining restaurant concepts. As of January 23, 2019, it owned 7 restaurant brands, including Fatburger, Buffalo's Cafe, Buffalo's Express, Hurricane Grill & Wings, Yalla Mediterranean, Ponderosa Steakhouse, and Bonanza Steakhouse with approximately 300 locations open and 300 under development in 32 countries. The company was founded in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. is a subsidiary of Fog Cutter Capital Group Inc.

Ruth’s Hospitality Group Company Profile

Ruth's Hospitality Group, Inc., together with its subsidiaries, develops, operates, and franchises fine dining restaurants under the Ruth's Chris Steak House name. Its restaurants offer food and beverage products to special occasion diners and frequent customers, as well as business clientele. As of February 22, 2019, the company had approximately 150 company-owned and franchisee-owned restaurants worldwide. Ruth's Hospitality Group, Inc. was founded in 1965 and is headquartered in Winter Park, Florida.

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