Critical Analysis: Dine Brands Global (NYSE:DIN) & Noodles & Co (NYSE:NDLS)
Dine Brands Global (NYSE:DIN) and Noodles & Co (NASDAQ:NDLS) 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 institutional ownership, dividends, analyst recommendations, profitability, valuation, risk and earnings.
Insider & Institutional Ownership
69.8% of Noodles & Co shares are owned by institutional investors. 2.7% of Dine Brands Global shares are owned by insiders. Comparatively, 30.7% of Noodles & Co shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Dine Brands Global pays an annual dividend of $2.76 per share and has a dividend yield of 2.9%. Noodles & Co does not pay a dividend. Dine Brands Global pays out 51.4% of its earnings in the form of a dividend.
Volatility & Risk
Dine Brands Global has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500. Comparatively, Noodles & Co has a beta of 0.11, meaning that its share price is 89% less volatile than the S&P 500.
Valuation & Earnings
This table compares Dine Brands Global and Noodles & Co’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Dine Brands Global||$780.93 million||2.14||$80.35 million||$5.37||17.78|
|Noodles & Co||$457.84 million||0.74||-$8.44 million||$0.02||385.00|
Dine Brands Global has higher revenue and earnings than Noodles & Co. Dine Brands Global is trading at a lower price-to-earnings ratio than Noodles & Co, indicating that it is currently the more affordable of the two stocks.
This table compares Dine Brands Global and Noodles & Co’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Dine Brands Global||11.30%||-53.27%||6.18%|
|Noodles & Co||-1.47%||3.70%||0.72%|
This is a breakdown of current ratings and target prices for Dine Brands Global and Noodles & Co, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Dine Brands Global||0||0||5||0||3.00|
|Noodles & Co||0||3||3||0||2.50|
Dine Brands Global currently has a consensus target price of $117.80, suggesting a potential upside of 23.35%. Noodles & Co has a consensus target price of $10.92, suggesting a potential upside of 41.77%. Given Noodles & Co’s higher probable upside, analysts plainly believe Noodles & Co is more favorable than Dine Brands Global.
Dine Brands Global beats Noodles & Co on 10 of the 16 factors compared between the two stocks.
Dine Brands Global Company Profile
Dine Brands Global, Inc., together with its subsidiaries, owns, franchises, operates, and rents full-service restaurants in the United States and internationally. It operates in five segments: Applebee's Franchise Operations, IHOP Franchise Operations, Rental Operations, Financing Operations, and Company-Operated Restaurant Operations. The company owns and franchises two restaurant concepts, including Applebee's Neighborhood Grill + Bar (Applebee's) in the bar and grill segment of the casual dining category; and International House of Pancakes (IHOP) in the family dining category of the restaurant industry. Its Applebee's restaurants offer American fare with drinks and drafts; and IHOP restaurants provide full table services, and food and beverage offerings. As of December 31, 2018, the company had 1,768 Applebee's franchised restaurants, and 1,831 IHOP franchised and area licensed restaurants. It is also involved in the lease or sublease of 676 IHOP franchised restaurants and 1 Applebee's franchised restaurant; and the financing of franchise fees and equipment leases. The company was formerly known as DineEquity, Inc. and changed its name to Dine Brands Global, Inc. in February 2018. Dine Brands Global, Inc. was founded in 1958 and is based in Glendale, California.
Noodles & Co Company Profile
Noodles & Company develops and operates fast-casual restaurants in the United States. It offers cooked-to-order dishes, including noodles and pasta, soups, salads, and appetizers. As of January 1, 2019, the company operated 394 company-owned and 65 franchised restaurants in 29 states, and the District of Columbia. Noodles & Company was founded in 1995 and is based in Broomfield, Colorado.
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