Ruth’s Hospitality Group (NASDAQ: RUTH) and Chanticleer Holdings (NASDAQ:BURG) are both small-cap cyclical consumer goods & services companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, institutional ownership, risk, analyst recommendations and profitability.

Dividends

Ruth’s Hospitality Group pays an annual dividend of $0.36 per share and has a dividend yield of 1.8%. Chanticleer Holdings does not pay a dividend. Ruth’s Hospitality Group pays out 37.5% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Ruth’s Hospitality Group and Chanticleer Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ruth’s Hospitality Group 0 3 1 0 2.25
Chanticleer Holdings 0 0 0 0 N/A

Ruth’s Hospitality Group currently has a consensus price target of $22.00, suggesting a potential upside of 8.91%. Given Ruth’s Hospitality Group’s higher probable upside, analysts plainly believe Ruth’s Hospitality Group is more favorable than Chanticleer Holdings.

Insider & Institutional Ownership

81.3% of Ruth’s Hospitality Group shares are held by institutional investors. 7.5% of Ruth’s Hospitality Group shares are held by insiders. Comparatively, 2.5% of Chanticleer Holdings shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Ruth’s Hospitality Group has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500. Comparatively, Chanticleer Holdings has a beta of 1.98, indicating that its stock price is 98% more volatile than the S&P 500.

Profitability

This table compares Ruth’s Hospitality Group and Chanticleer Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ruth’s Hospitality Group 7.47% 35.46% 14.90%
Chanticleer Holdings -15.66% -48.28% -19.80%

Valuation and Earnings

This table compares Ruth’s Hospitality Group and Chanticleer Holdings’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Ruth’s Hospitality Group $385.95 million 1.64 $30.46 million $0.96 21.04
Chanticleer Holdings $41.70 million 0.16 -$9.07 million ($2.88) -0.75

Ruth’s Hospitality Group has higher revenue and earnings than Chanticleer Holdings. Chanticleer Holdings is trading at a lower price-to-earnings ratio than Ruth’s Hospitality Group, indicating that it is currently the more affordable of the two stocks.

Summary

Ruth’s Hospitality Group beats Chanticleer Holdings on 12 of the 14 factors compared between the two stocks.

Ruth’s Hospitality Group Company Profile

Ruth’s Hospitality Group, Inc. develops and operates fine dining restaurants under the name, Ruth’s Chris Steak House. The Company operates through two segments. As of December 25, 2016, the Company-owned steakhouse restaurant segment included 68 Ruth’s Chris Steak House restaurants and one Ruth’s Chris Steak House restaurant, and the franchise operations segment included 81 franchisee-owned Ruth’s Chris Steak House restaurants. Its restaurant’s menu features a selection of Prime and Choice grade steaks, and other offerings. Its menu also includes lamb chops, fish, shrimp, crab, chicken and lobster. Its Ruth’s Chris restaurants offer 10 to 13 appetizer items, including Orleans-style barbequed shrimp, mushrooms stuffed with crabmeat, lobster bisque and osso bucco ravioli. It also offers a range of potatoes and vegetables as side dishes. For dessert, creme brulee, white chocolate bread pudding, cheesecake, fresh seasonal berries with sweet cream sauce and other selections are available.

Chanticleer Holdings Company Profile

Chanticleer Holdings, Inc. is engaged in the business of owning, operating and franchising fast casual dining concepts domestically and internationally. The Company’s brands include Hooters, American Burger Company (ABC), BGR: the Burger Joint (BGR), BT’s Burger Joint (BT), Little Big Burger (LBB) and Just Fresh. Hooters restaurants are casual beach-themed establishments featuring music, sports on large flat screens, and a menu that includes seafood, burgers, salads and Hooters original chicken wings. ABC is a fast casual dining chain located in North Carolina, South Carolina and New York. BGR consists of approximately 10 Company-owned locations in the United States and over 13 franchisee-operated locations in the United States and the Middle East. LBB consists of approximately eight locations in Oregon. Just Fresh consists of approximately seven Company owned locations in Charlotte, North Carolina.

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