Critical Contrast: FAT Brands (NASDAQ:FATBB) vs. Centerra Gold (NYSE:CGAU)

FAT Brands (NASDAQ:FATBB) and Centerra Gold (NYSE:CGAU) are both materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Volatility and Risk

FAT Brands has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500. Comparatively, Centerra Gold has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for FAT Brands and Centerra Gold, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FAT Brands	1	0	0	0	1.00
Centerra Gold	1	1	5	0	2.57

Centerra Gold has a consensus price target of $21.00, suggesting a potential downside of 4.15%. Given Centerra Gold’s stronger consensus rating and higher possible upside, analysts plainly believe Centerra Gold is more favorable than FAT Brands.

Profitability

This table compares FAT Brands and Centerra Gold’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FAT Brands	-39.33%	N/A	-17.57%
Centerra Gold	36.92%	15.35%	10.73%

Valuation and Earnings

This table compares FAT Brands and Centerra Gold”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FAT Brands	$574.14 million	0.03	-$189.85 million	($13.35)	-0.07
Centerra Gold	$1.38 billion	3.09	$583.99 million	$3.13	7.00

Centerra Gold has higher revenue and earnings than FAT Brands. FAT Brands is trading at a lower price-to-earnings ratio than Centerra Gold, indicating that it is currently the more affordable of the two stocks.

Dividends

FAT Brands pays an annual dividend of $0.14 per share and has a dividend yield of 15.8%. Centerra Gold pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. FAT Brands pays out -1.0% of its earnings in the form of a dividend. Centerra Gold pays out 6.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. FAT Brands is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

55.4% of Centerra Gold shares are owned by institutional investors. 59.9% of FAT Brands shares are owned by company insiders. Comparatively, 0.2% of Centerra Gold shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Centerra Gold beats FAT Brands on 12 of the 16 factors compared between the two stocks.

About FAT Brands

FAT Brands Inc., a multi-brand restaurant franchising company, acquires, develops, markets, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts worldwide. It owns restaurant brands, including Round Table Pizza, Marble Slab Creamery, Great American Cookies, Hot Dog on a Stick, Pretzelmaker, Fazoli's, Fatburger, Johnny Rockets, Elevation Burger, Yalla Mediterranean, Buffalo's Cafe and Buffalo's Express, Hurricane Grill & Wings, Ponderosa Steakhouse/Bonanza Steakhouse, Native Grill & Wings, Smokey Bones, and Twin Peaks. The company was incorporated in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. is a subsidiary of Fog Cutter Holdings, LLC.

About Centerra Gold

Centerra Gold Inc., a gold mining company, engages in the acquisition, exploration, development, and operation of gold and copper properties in North America, Turkey, and internationally. The company explores for gold, copper, and molybdenum deposits. Its flagship projects are the 100% owned Mount Milligan gold-copper mine located in British Columbia, Canada; and the Öksüt gold mine located in Turkey. The company was incorporated in 2002 and is based in Toronto, Canada.