Head-To-Head Analysis: RCI Hospitality Holdings (RICK) vs. Dave & Buster’s Entertainment (PLAY)
RCI Hospitality Holdings (NASDAQ: RICK) and Dave & Buster’s Entertainment (NASDAQ:PLAY) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, profitabiliy, dividends, analyst recommendations, risk, valuation and institutional ownership.
Insider & Institutional Ownership
39.9% of RCI Hospitality Holdings shares are owned by institutional investors. 6.9% of RCI Hospitality Holdings shares are owned by company insiders. Comparatively, 5.6% of Dave & Buster’s Entertainment shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares RCI Hospitality Holdings and Dave & Buster’s Entertainment’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|RCI Hospitality Holdings||7.16%||9.97%||4.77%|
|Dave & Buster’s Entertainment||9.78%||22.71%||9.34%|
Valuation and Earnings
This table compares RCI Hospitality Holdings and Dave & Buster’s Entertainment’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|RCI Hospitality Holdings||$135.25 million||1.64||$33.74 million||$1.00||22.84|
|Dave & Buster’s Entertainment||$1.05 billion||2.36||$254.99 million||$2.36||25.36|
Dave & Buster’s Entertainment has higher revenue and earnings than RCI Hospitality Holdings. RCI Hospitality Holdings is trading at a lower price-to-earnings ratio than Dave & Buster’s Entertainment, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and recommmendations for RCI Hospitality Holdings and Dave & Buster’s Entertainment, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|RCI Hospitality Holdings||0||0||2||0||3.00|
|Dave & Buster’s Entertainment||0||0||9||0||3.00|
RCI Hospitality Holdings currently has a consensus target price of $28.50, indicating a potential upside of 24.78%. Dave & Buster’s Entertainment has a consensus target price of $77.50, indicating a potential upside of 29.51%. Given Dave & Buster’s Entertainment’s higher possible upside, analysts clearly believe Dave & Buster’s Entertainment is more favorable than RCI Hospitality Holdings.
Risk and Volatility
RCI Hospitality Holdings has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500. Comparatively, Dave & Buster’s Entertainment has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500.
RCI Hospitality Holdings pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. Dave & Buster’s Entertainment does not pay a dividend. RCI Hospitality Holdings pays out 12.0% of its earnings in the form of a dividend.
Dave & Buster’s Entertainment beats RCI Hospitality Holdings on 12 of the 15 factors compared between the two stocks.
RCI Hospitality Holdings Company Profile
With more than 40 units, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in gentlemen’s clubs and sports bars/restaurants. Clubs in New York City, Miami, Philadelphia, Charlotte, Dallas/Ft. Worth, Houston, Minneapolis, and other cities operate under brand names, such as “Rick’s Cabaret,” “XTC,” “Club Onyx,” “Vivid Cabaret,” “Jaguars” and “Tootsie’s Cabaret.” Sports bars/restaurants operate under the brand name “Bombshells Restaurant & Bar.” Investors are attracted by RCI’s strong cash flow, operating margins and local laws that create high barriers to entry in the gentlemen’s club business.
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