Good Times Restaurants (NASDAQ: GTIM) and Biglari Holdings (NYSE:BH) are both small-cap retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Insider and Institutional Ownership

32.7% of Good Times Restaurants shares are owned by institutional investors. Comparatively, 89.0% of Biglari Holdings shares are owned by institutional investors. 8.4% of Good Times Restaurants shares are owned by company insiders. Comparatively, 51.2% of Biglari Holdings shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Good Times Restaurants and Biglari Holdings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Good Times Restaurants $73.71 million 0.51 $2.12 million ($0.14) -21.43
Biglari Holdings $839.07 million 0.85 $43.14 million $12.92 26.62

Biglari Holdings has higher revenue and earnings than Good Times Restaurants. Good Times Restaurants is trading at a lower price-to-earnings ratio than Biglari Holdings, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for Good Times Restaurants and Biglari Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Good Times Restaurants 0 0 1 0 3.00
Biglari Holdings 0 1 0 0 2.00

Good Times Restaurants currently has a consensus target price of $6.00, indicating a potential upside of 100.00%. Given Good Times Restaurants’ stronger consensus rating and higher possible upside, equities analysts clearly believe Good Times Restaurants is more favorable than Biglari Holdings.

Profitability

This table compares Good Times Restaurants and Biglari Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Good Times Restaurants -2.25% -4.44% -3.35%
Biglari Holdings 1.92% 3.15% 1.52%

Risk and Volatility

Good Times Restaurants has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, Biglari Holdings has a beta of 0.39, indicating that its stock price is 61% less volatile than the S&P 500.

Summary

Biglari Holdings beats Good Times Restaurants on 9 of the 13 factors compared between the two stocks.

About Good Times Restaurants

Good Times Restaurants Inc. operates and franchises Good Times Burgers & Frozen Custard (Good Times) restaurants and Bad Daddy’s Burger Bar concept (Bad Daddy’s). The Company operates through two segments: Good Times Burgers and Frozen Custard restaurants, and Bad Daddy’s Burger Bar restaurants. Good Times is a quick service restaurant concept. The menu of a Good Times restaurant includes hamburgers, cheeseburgers, chicken sandwiches, French fries, onion rings, soft drinks and frozen custard products. Its breakfast menu includes breakfast burritos, orange juice and coffee. Bad Daddy’s operates in the burger casual dining sector and is chef driven, full service, full bar concept. Its menu consists of burgers, salads, sandwiches and appetizers. Its bar focuses on local, craft microbrew beers and specialty cocktails. The Company operates through its subsidiaries, Good Times Drive Thru, Inc., BD of Colorado, LLC, Bad Daddy’s Franchise Development, LLC and Bad Daddy’s International, LLC.

About Biglari Holdings

Biglari Holdings Inc. is a holding company owning subsidiaries engaged in various business activities, including media, property and casualty insurance, and restaurants The Company’s segments include Restaurant Operations, First Guard, Maxim, Other and Corporate. The Company’s restaurant operations’ activities are conducted through approximately two restaurant concepts operated by subsidiaries Steak n Shake Inc. (Steak n Shake) and Western Sizzlin Corporation (Western). Steak n Shake is engaged in the ownership, operation and franchising of Steak n Shake restaurants. Western is engaged primarily in the franchising of restaurants. The Company’s insurance business consists of First Guard Insurance Company and its agency, 1st Guard Corporation. First Guard is a direct underwriter of commercial trucking insurance, selling physical damage and non-trucking liability insurance to truckers. Its media business consists of Maxim. Maxim’s business lies principally in media and licensing.

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