Critical Review: Meridian (NASDAQ:MRDN) and Jack In The Box (NASDAQ:JACK)

Jack In The Box (NASDAQ:JACK) and Meridian (NASDAQ:MRDN) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, profitability and dividends.

Earnings and Valuation

This table compares Jack In The Box and Meridian”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jack In The Box	$1.43 billion	0.15	$33.18 million	$1.73	6.51
Meridian	$197.19 million	0.65	-$85.48 million	($6.74)	-1.50

Jack In The Box has higher revenue and earnings than Meridian. Meridian is trading at a lower price-to-earnings ratio than Jack In The Box, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Jack In The Box and Meridian’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jack In The Box	N/A	N/A	N/A
Meridian	N/A	N/A	N/A

Insider and Institutional Ownership

99.8% of Jack In The Box shares are held by institutional investors. Comparatively, 2.7% of Meridian shares are held by institutional investors. 1.4% of Jack In The Box shares are held by company insiders. Comparatively, 9.9% of Meridian shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk & Volatility

Jack In The Box has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500. Comparatively, Meridian has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Jack In The Box and Meridian, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jack In The Box	3	12	2	0	1.94
Meridian	1	0	0	0	1.00

Jack In The Box presently has a consensus target price of $16.83, indicating a potential upside of 49.36%. Meridian has a consensus target price of $21.60, indicating a potential upside of 113.86%. Given Meridian’s higher possible upside, analysts clearly believe Meridian is more favorable than Jack In The Box.

Summary

Jack In The Box beats Meridian on 8 of the 11 factors compared between the two stocks.

About Jack In The Box

Jack in the Box Inc. operates and franchises Jack in the Box and Del Taco quick-service restaurants in the United States. The company was founded in 1951 and is headquartered in San Diego, California.

About Meridian

Meridian Holdings Inc is engaged in the online gaming and betting business, providing sports betting, online casino, and gaming operations across multiple jurisdictions in Europe, Africa, and Central and South America. The company has three reportable segments: MeridianBet Group, GMAG, and RKings & CFAC. The MeridianBet Group segment includes retail and online sports betting, casinos, and related gaming operations. The GMAG segment focuses on the resale of third-party gaming content, mainly serving customers in the Asia-Pacific region. The RKings & CFAC segment is involved in pay-to-enter prize competitions and trade promotions conducted in the United Kingdom and Australia. It generates the majority of its revenue from the MeridianBet Group segment.