Head-To-Head Review: Biglari (BH) vs. Luby's (LUB)

Biglari (NYSE: BH) and Luby's (NYSE:LUB) are both small-cap cyclical consumer goods & services companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Analyst Recommendations

This is a summary of recent recommendations for Biglari and Luby's, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Biglari 0 0 0 0 N/A
Luby's 0 0 0 0 N/A

Valuation & Earnings

This table compares Biglari and Luby's’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Biglari $850.08 million 0.97 $99.45 million $42.97 9.28
Luby's $376.03 million 0.23 -$23.26 million ($0.77) -3.77

Biglari has higher revenue and earnings than Luby's. Luby's is trading at a lower price-to-earnings ratio than Biglari, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

87.3% of Biglari shares are owned by institutional investors. Comparatively, 40.7% of Luby's shares are owned by institutional investors. 51.2% of Biglari shares are owned by company insiders. Comparatively, 37.8% of Luby's shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Biglari has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500. Comparatively, Luby's has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500.

Profitability

This table compares Biglari and Luby's’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Biglari 6.16% 9.84% 4.84%
Luby's -6.01% -5.59% -3.50%

Summary

Biglari beats Luby's on 10 of the 11 factors compared between the two stocks.

Biglari Company Profile

Biglari Holdings Inc. is a holding company owning subsidiaries engaged in various business activities, including media, property and casualty insurance, and restaurants The Company’s segments include Restaurant Operations, First Guard, Maxim, Other and Corporate. The Company’s restaurant operations’ activities are conducted through approximately two restaurant concepts operated by subsidiaries Steak n Shake Inc. (Steak n Shake) and Western Sizzlin Corporation (Western). Steak n Shake is engaged in the ownership, operation and franchising of Steak n Shake restaurants. Western is engaged primarily in the franchising of restaurants. The Company’s insurance business consists of First Guard Insurance Company and its agency, 1st Guard Corporation. First Guard is a direct underwriter of commercial trucking insurance, selling physical damage and non-trucking liability insurance to truckers. Its media business consists of Maxim. Maxim’s business lies principally in media and licensing.

Luby's Company Profile

Luby’s, Inc., is a multi-branded company operating in the restaurant industry and in the contract food services industry. The Company is managed through three segments: Company-owned restaurants, franchise operations, and Culinary Contract Services (CSS). The company-owned restaurants brands are Luby’s Cafeteria, Fuddruckers, and Cheeseburger in Paradise with a couple of non-core restaurant locations under other brand names. As of August 31, 2016, the Company owned and operated 175 restaurants, with 127 in Texas and the remainder in other states. The Company offers franchises for the Fuddruckers brand. As of August 31, 2016, the number of franchised restaurants were 113. Culinary Contract Services consists of contract arrangements to manage food services for clients operating in three lines of business: healthcare, higher education, and corporate dining. As of August 31, 2016, the Company had 24 Culinary Contract Services contracts.

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