CAVA Group (NYSE:CAVA) and DINE BRANDS GLOBAL (NYSE:DIN) Critical Analysis

CAVA Group (NYSE:CAVA) and DINE BRANDS GLOBAL (NYSE:DIN) are both retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, risk, earnings, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for CAVA Group and DINE BRANDS GLOBAL, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CAVA Group	0	9	11	1	2.62
DINE BRANDS GLOBAL	1	8	1	0	2.00

CAVA Group currently has a consensus price target of $94.26, suggesting a potential upside of 43.86%. DINE BRANDS GLOBAL has a consensus price target of $26.86, suggesting a potential downside of 4.16%. Given CAVA Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe CAVA Group is more favorable than DINE BRANDS GLOBAL.

Profitability

This table compares CAVA Group and DINE BRANDS GLOBAL’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CAVA Group	12.98%	9.83%	5.75%
DINE BRANDS GLOBAL	5.40%	-31.66%	3.87%

Insider & Institutional Ownership

73.2% of CAVA Group shares are owned by institutional investors. Comparatively, 92.8% of DINE BRANDS GLOBAL shares are owned by institutional investors. 12.1% of CAVA Group shares are owned by insiders. Comparatively, 4.6% of DINE BRANDS GLOBAL 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.

Valuation & Earnings

This table compares CAVA Group and DINE BRANDS GLOBAL”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CAVA Group	$963.71 million	7.88	$130.32 million	$1.19	55.06
DINE BRANDS GLOBAL	$812.31 million	0.53	$64.89 million	$3.00	9.34

CAVA Group has higher revenue and earnings than DINE BRANDS GLOBAL. DINE BRANDS GLOBAL is trading at a lower price-to-earnings ratio than CAVA Group, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

CAVA Group has a beta of 2.5, indicating that its stock price is 150% more volatile than the S&P 500. Comparatively, DINE BRANDS GLOBAL has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.

Summary

CAVA Group beats DINE BRANDS GLOBAL on 13 of the 15 factors compared between the two stocks.

About CAVA Group

CAVA Group, Inc. owns and operates a chain of restaurants under the CAVA brand in the United States. The company also offers dips, spreads, and dressings through grocery stores. In addition, the company provides online and mobile ordering platforms. Cava Group, Inc. was founded in 2006 and is headquartered in Washington, the District of Columbia.

About DINE BRANDS GLOBAL

Dine Brands Global, Inc., together with its subsidiaries, owns, franchises, and operates restaurants in the United States and internationally. The company operates through six segments: Applebee's Franchise Operations, International House of Pancakes (IHOP) Franchise Solutions, Fuzzy's franchise operations, Rental Operations, Financing Operations, and Company-Operated Restaurant Operations. It owns and franchises three restaurant concepts, including Applebee's Neighborhood Grill + Bar within the casual dining category; and IHOP in the family dining category of the restaurant industry; Fuzzy's Taco Shop within the fast-casual dining category. In addition, its Applebee's restaurants offer American fare with drinks and local draft beers; IHOP restaurants provide full table services, food and beverage; and Fuzzy's Taco Shop offers baja-style mexican food like baja tacos, chips and queso, guacamole and salsa made in house, and a full bar including margaritas, and cold draft beer. The company was formerly known as DineEquity, Inc. and changed its name to Dine Brands Global, Inc. in February 2018. Dine Brands Global, Inc. was founded in 1958 and is headquartered in Pasadena, California.