Critical Survey: Meritage Hospitality Group (OTCMKTS:MHGU) and Biglari (NYSE:BH.A)

Valuation & Earnings

This table compares Biglari and Meritage Hospitality Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Biglari	$362.11 million	11.07	$333.66 million	$146.34	12.01
Meritage Hospitality Group	$668.80 million	0.06	$7.80 million	($0.51)	-12.20

Biglari has higher earnings, but lower revenue than Meritage Hospitality Group. Meritage Hospitality Group is trading at a lower price-to-earnings ratio than Biglari, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

7.7% of Biglari shares are owned by institutional investors. 70.9% of Biglari shares are owned by insiders. Comparatively, 67.8% of Meritage Hospitality Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Biglari has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, Meritage Hospitality Group has a beta of -0.02, indicating that its stock price is 102% less volatile than the S&P 500.

Profitability

This table compares Biglari and Meritage Hospitality Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Biglari	N/A	N/A	N/A
Meritage Hospitality Group	-0.10%	-0.54%	-0.08%

Summary

Biglari beats Meritage Hospitality Group on 10 of the 11 factors compared between the two stocks.

About Biglari

Biglari Holdings Inc., through its subsidiaries, primarily operates and franchises restaurants in the United States. The company owns, operates, and franchises restaurants under the Steak n Shake and Western Sizzlin names. As of December 31, 2019, it operated 368 Steak n Shake company-operated restaurants and 213 franchised units; and 4 Western Sizzlin company-operated restaurants and 48 franchised units. The company also engages in underwriting commercial trucking insurance, and selling physical damage and non-trucking liability insurance to truckers; and operates oil and natural gas properties offshore in the Gulf of Mexico. In addition, it publishes and sells magazines, and related publishing products under the MAXIM and Maxim brand name; and licenses media products and services, as well as is involved in the investment activities. The company was formerly known as The Steak n Shake Company and changed its name to Biglari Holdings Inc. in April 2010. Biglari Holdings Inc. was founded in 1934 and is based in San Antonio, Texas.

About Meritage Hospitality Group

Meritage Hospitality Group Inc. operates quick-service and casual dining restaurants. The company operates restaurants under the Wendy's, Morning Belle, and Stan's Tacos, as well as Taco John's brand names in Arkansas, Connecticut, Florida, Georgia, Indiana, Massachusetts, Michigan, Missouri, Mississippi, North Carolina, South Carolina, Ohio, Oklahoma, Tennessee, Texas, and Virginia. It is also involved in franchising activities. The company was formerly known as Thomas Edison Inns, Inc. and changed its name to Meritage Hospitality Group Inc. in May 1996. Meritage Hospitality Group Inc. was incorporated in 1986 and is based in Grand Rapids, Michigan.