Analyzing Meritage Hospitality Group (OTCMKTS:MHGU) and Compass Group (OTCMKTS:CMPGY)

Meritage Hospitality Group (OTCMKTS:MHGU) and Compass Group (OTCMKTS:CMPGY) are both retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.

Risk & Volatility

Meritage Hospitality Group has a beta of 0.03, indicating that its share price is 97% less volatile than the S&P 500. Comparatively, Compass Group has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500.

Insider and Institutional Ownership

0.0% of Compass Group shares are owned by institutional investors. 67.8% of Meritage Hospitality Group shares are owned by insiders. Comparatively, 0.0% of Compass Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Meritage Hospitality Group and Compass Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Meritage Hospitality Group	0	0	0	0	0.00
Compass Group	0	0	2	2	3.50

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Meritage Hospitality Group	-1.28%	-6.70%	-1.03%
Compass Group	N/A	N/A	N/A

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Meritage Hospitality Group	$668.80 million	0.02	$7.80 million	($1.65)	-1.36
Compass Group	$46.07 billion	1.13	$1.87 billion	N/A	N/A

Compass Group has higher revenue and earnings than Meritage Hospitality Group.

Summary

Compass Group beats Meritage Hospitality Group on 11 of the 12 factors compared between the two stocks.

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.

About Compass Group

Compass Group PLC operates as a food and support services company in North America, Europe, and internationally. The company offers support services, such as cleaning in hospitals; reception services at corporate headquarters; managing remote camps; grounds and facilities services at schools and universities; and others. It serves business and industry; healthcare and senior living market; education; sports and leisure; and defense, offshore, and remote sectors. Compass Group PLC was founded in 1941 and is based in Chertsey, the United Kingdom.