Fogo De Chao (NASDAQ:FOGO) and Ruth’s Hospitality Group (NASDAQ:RUTH) are both retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Profitability

This table compares Fogo De Chao and Ruth’s Hospitality Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fogo De Chao N/A N/A N/A
Ruth’s Hospitality Group 8.10% 47.19% 17.15%

Insider & Institutional Ownership

90.7% of Fogo De Chao shares are owned by institutional investors. Comparatively, 83.9% of Ruth’s Hospitality Group shares are owned by institutional investors. 82.8% of Fogo De Chao shares are owned by insiders. Comparatively, 7.5% of Ruth’s Hospitality Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Ruth’s Hospitality Group pays an annual dividend of $0.44 per share and has a dividend yield of 1.8%. Fogo De Chao does not pay a dividend. Ruth’s Hospitality Group pays out 40.0% of its earnings in the form of a dividend. Ruth’s Hospitality Group has increased its dividend for 4 consecutive years.

Analyst Recommendations

This is a summary of current ratings and target prices for Fogo De Chao and Ruth’s Hospitality Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fogo De Chao 0 4 1 0 2.20
Ruth’s Hospitality Group 0 3 0 0 2.00

Fogo De Chao presently has a consensus target price of $14.88, suggesting a potential downside of 5.56%. Ruth’s Hospitality Group has a consensus target price of $28.50, suggesting a potential upside of 18.60%. Given Ruth’s Hospitality Group’s higher possible upside, analysts clearly believe Ruth’s Hospitality Group is more favorable than Fogo De Chao.

Valuation & Earnings

This table compares Fogo De Chao and Ruth’s Hospitality Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fogo De Chao N/A N/A N/A N/A N/A
Ruth’s Hospitality Group $414.82 million 1.78 $30.13 million $1.10 21.85

Ruth’s Hospitality Group has higher revenue and earnings than Fogo De Chao.

Summary

Ruth’s Hospitality Group beats Fogo De Chao on 7 of the 12 factors compared between the two stocks.

Fogo De Chao Company Profile

Fogo de Chao, Inc. is a United States-based holding company. The Company, through its subsidiaries, operates upscale Brazilian churrascaria steakhouses under the brand of Fogo de Chao. The Company owns 100% of Brasa (Purchaser) Inc. (Brasa Purchaser), which owns 100% of Brasa (Holdings) Inc. (Brasa Holdings). The Company operates through two segments: United States and Brazil. It specializes in fire-roasting meats utilizing the centuries-old Southern Brazilian cooking technique of churrasco. The Company offers its guests a tasting menu of meats featuring up to 20 cuts, simply seasoned and fire-roasted to expose their natural flavors. The Company operates approximately 26 restaurants in the United States, 10 in Brazil and one in Mexico. The Company operates a range of restaurant formats, including in-line and free-standing locations. Its restaurants range in size from approximately 7,000 to 16,000 square feet, with seating from 200 to 500 guests.

Ruth’s Hospitality Group Company Profile

Ruth's Hospitality Group, Inc., together with its subsidiaries, develops, operates, and franchises fine dining restaurants under the Ruth's Chris Steak House name. Its restaurants offer food and beverage products to special occasion diners and frequent customers, as well as business clientele. As of December 31, 2017, the company had 155 Ruth's Chris Steak House restaurants, including 77 company-owned restaurants; 2 restaurant operating under a contractual agreement; and 76 franchisee-owned restaurants comprising 21 international franchisee-owned restaurants in Aruba, Canada, China, Hong Kong, Indonesia, Japan, Mexico, Panama, Singapore, Taiwan, and the United Arab Emirates. Ruth's Hospitality Group, Inc. was founded in 1965 and is headquartered in Winter Park, Florida.

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