El Pollo Loco (NASDAQ:LOCO – Get Free Report) and Inspired Entertainment (NASDAQ:INSE – Get Free Report) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.
Profitability
This table compares El Pollo Loco and Inspired Entertainment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| El Pollo Loco | 6.96% | 10.87% | 5.32% |
| Inspired Entertainment | -3.34% | -30.08% | 0.92% |
Volatility & Risk
El Pollo Loco has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, Inspired Entertainment has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| El Pollo Loco | $500.79 million | 0.93 | $26.49 million | $1.17 | 13.09 |
| Inspired Entertainment | $281.40 million | 0.35 | -$17.00 million | ($0.33) | -11.39 |
El Pollo Loco has higher revenue and earnings than Inspired Entertainment. Inspired Entertainment is trading at a lower price-to-earnings ratio than El Pollo Loco, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
81.3% of El Pollo Loco shares are owned by institutional investors. Comparatively, 77.4% of Inspired Entertainment shares are owned by institutional investors. 3.0% of El Pollo Loco shares are owned by company insiders. Comparatively, 14.4% of Inspired Entertainment shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Analyst Ratings
This is a summary of recent recommendations and price targets for El Pollo Loco and Inspired Entertainment, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| El Pollo Loco | 0 | 4 | 4 | 1 | 2.67 |
| Inspired Entertainment | 1 | 2 | 0 | 0 | 1.67 |
El Pollo Loco presently has a consensus price target of $17.30, indicating a potential upside of 12.92%. Inspired Entertainment has a consensus price target of $20.00, indicating a potential upside of 431.91%. Given Inspired Entertainment’s higher possible upside, analysts clearly believe Inspired Entertainment is more favorable than El Pollo Loco.
Summary
El Pollo Loco beats Inspired Entertainment on 12 of the 15 factors compared between the two stocks.
About El Pollo Loco
El Pollo Loco Holdings, Inc., through its subsidiary, El Pollo Loco, Inc., develops, franchises, licenses, and operates quick-service restaurants under the El Pollo Loco name. It operates and franchises restaurants located in California, Nevada, Arizona, Texas, Colorado, Utah, and Louisiana. It also licenses its brand to restaurants in the Philippines. The company was formerly known as Chicken Acquisition Corp. and changed its name to El Pollo Loco Holdings, Inc. in April 2014. El Pollo Loco Holdings, Inc. was founded in 1975 and is headquartered in Costa Mesa, California.
About Inspired Entertainment
Inspired Entertainment, Inc., a gaming technology company, engages in the supply of content, platform, and other products and services to regulated lottery, betting, and gaming operators worldwide. It operates in four segments: Gaming, Virtual Sports, Interactive, and Leisure. The Gaming segment supplies gaming terminals and software to betting offices, casinos, gaming halls, and high street adult gaming centers; a portfolio of games through its digital terminals under the Centurion and Super Hot Fruits names; and traditional casino games, such as roulette, blackjack, and number games. The Virtual Sports segment designs, develops, markets, and distributes ultra-high-definition sports games, including greyhounds, tennis, motor racing, cycling, cricket, speedway, golf, and dart, and other horse racing games under the V-Play Soccer, V-Play Women's Soccer, V-Play Football, V-Play Basketball, V-Play Baseball, and V-Play NFLA names. The Interactive segment provides a range of random number generated casino content from feature-rich bonus games to European-style casino free spins and table games. The Leisure segment supplies gaming terminals and amusement machines in pubs, bingo halls, and adult gaming centers, as well as family entertainment centers, bowling centers, and other entertainment venues. Inspired Entertainment, Inc. is headquartered in New York, New York.
Receive News & Ratings for El Pollo Loco Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for El Pollo Loco and related companies with MarketBeat.com's FREE daily email newsletter.
