Ruby Tuesday (NYSE: RT) and Chuy's (NASDAQ:CHUY) are both small-cap retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.
Institutional & Insider Ownership
77.3% of Ruby Tuesday shares are owned by institutional investors. Comparatively, 95.8% of Chuy's shares are owned by institutional investors. 4.8% of Ruby Tuesday shares are owned by company insiders. Comparatively, 3.3% of Chuy's shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares Ruby Tuesday and Chuy's’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility & Risk
Ruby Tuesday has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500. Comparatively, Chuy's has a beta of 0.02, suggesting that its stock price is 98% less volatile than the S&P 500.
Valuation and Earnings
This table compares Ruby Tuesday and Chuy's’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Ruby Tuesday||$951.97 million||0.15||-$106.14 million||($1.26)||-1.89|
|Chuy's||$330.61 million||1.34||$17.24 million||$0.91||28.74|
Chuy's has lower revenue, but higher earnings than Ruby Tuesday. Ruby Tuesday is trading at a lower price-to-earnings ratio than Chuy's, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent recommendations for Ruby Tuesday and Chuy's, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Chuy's has a consensus price target of $26.00, suggesting a potential downside of 0.57%. Given Chuy's’ higher possible upside, analysts clearly believe Chuy's is more favorable than Ruby Tuesday.
Chuy's beats Ruby Tuesday on 9 of the 12 factors compared between the two stocks.
Ruby Tuesday Company Profile
Ruby Tuesday, Inc. owns and operates Ruby Tuesday casual dining and Lime Fresh Mexican Grill (Lime Fresh) casual restaurants. The Company also franchises the Ruby Tuesday concept in selected domestic and international markets, and the Lime Fresh concept in selected domestic markets. Its segments include Ruby Tuesday concept and Lime Fresh concept. As of March 1, 2016, the Company operated 729 Ruby Tuesday restaurants in 44 states, 13 foreign countries, and Guam, and there were 16 Lime Fresh restaurants in two states. Of those restaurants, it owned and operated approximately 649 Ruby Tuesday restaurants and franchised over 80 Ruby Tuesday restaurants, which consisted of 28 domestic and 52 international restaurants. It also owned and operated over eight Lime Fresh restaurants and franchised eight Lime Fresh domestic restaurants. The Company’s corporate-owned and operated restaurants are concentrated primarily in the Southeast, Northeast, Mid-Atlantic and Midwest of the United States.
Chuy's Company Profile
Chuy’s Holdings, Inc. operates Chuy’s, a restaurant concept offering a distinct menu of authentic, freshly prepared Mexican and Tex-Mex inspired food. As of December 25, 2016, the Company operated 80 Chuy’s restaurants across 16 states. The Company offers the same menu during lunch and dinner, which includes enchiladas, fajitas, tacos, burritos, combination platters and daily specials, complemented by a range of appetizers, soups and salads. Each of the Company’s restaurants offers a range of homemade sauces, including the signature Hatch green chile and creamy jalapeno sauces. The Company also offers a full-service bar in all of its restaurants providing its customers a range of beverage offerings, featuring a selection of specialty cocktails including its signature on-the-rocks margaritas made with fresh, hand-squeezed lime juice, and the Texas Martini, a made-to-order, hand-shaken cocktail served with jalapeno-stuffed olives.
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