Habit Restaurants (NASDAQ:HABT) and Meritage Hospitality Group (OTCMKTS:MHGU) are both small-cap retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.
Risk & Volatility
Habit Restaurants has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, Meritage Hospitality Group has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500.
This table compares Habit Restaurants and Meritage Hospitality Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Meritage Hospitality Group||N/A||N/A||N/A|
Institutional & Insider Ownership
59.6% of Habit Restaurants shares are owned by institutional investors. 16.0% of Habit Restaurants 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.
This is a summary of current ratings and recommmendations for Habit Restaurants and Meritage Hospitality Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Meritage Hospitality Group||0||0||0||0||N/A|
Habit Restaurants presently has a consensus price target of $15.14, suggesting a potential upside of 1.97%. Given Habit Restaurants’ higher possible upside, equities research analysts clearly believe Habit Restaurants is more favorable than Meritage Hospitality Group.
Earnings and Valuation
This table compares Habit Restaurants and Meritage Hospitality Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Habit Restaurants||$331.70 million||1.17||-$2.80 million||$0.16||92.81|
|Meritage Hospitality Group||$235.77 million||0.48||$6.44 million||N/A||N/A|
Meritage Hospitality Group has lower revenue, but higher earnings than Habit Restaurants.
Habit Restaurants beats Meritage Hospitality Group on 9 of the 11 factors compared between the two stocks.
About Habit Restaurants
The Habit Restaurants, Inc., a holding company, operates and franchises fast casual restaurants under The Habit Burger Grill name. It specializes in offering made-to-order char-grilled burgers and sandwiches featuring choice tri-tip steak, grilled chicken, and sushi-grade tuna cooked over an open flame; and salads, as well as sides, shakes, and malts. As of June 26, 2018, the company had 235 restaurants in California, Arizona, Utah, New Jersey, Florida, Idaho, Virginia, Nevada, Washington, Maryland, and Pennsylvania, as well as 4 international locations. The Habit Restaurants, Inc. was founded in 1969 and is headquartered in Irvine, California.
About Meritage Hospitality Group
Meritage Hospitality Group Inc. operates quick-service and casual dining restaurants. The company operates restaurants under the Wendy's, Twisted Rooster, Crooked Goose, Freighters Eatery & Taproom, and Wheelhouse Kitchen & Cocktails brand names. As of December 31, 2017, it operated 249 restaurants in Arkansas, Connecticut, Florida, Georgia, Massachusetts, Michigan, Missouri, Mississippi, North Carolina, South Carolina, Ohio, Oklahoma, Tennessee, Texas, and Virginia. The company was formerly known as Thomas Edison Inns, Inc. and changed its name to Meritage Hospitality Group Inc. in May 1996. Meritage Hospitality Group Inc. was incorporated in 1986 and is headquartered in Grand Rapids, Michigan.
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