Comparing RCI Hospitality (RICK) and Ark Restaurants (ARKR)

RCI Hospitality (NASDAQ:RICK) and Ark Restaurants (NASDAQ:ARKR) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, dividends, risk and earnings.

Insider & Institutional Ownership

49.3% of RCI Hospitality shares are owned by institutional investors. Comparatively, 23.8% of Ark Restaurants shares are owned by institutional investors. 7.5% of RCI Hospitality shares are owned by insiders. Comparatively, 43.4% of Ark Restaurants shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

RCI Hospitality has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, Ark Restaurants has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500.

Valuation and Earnings

This table compares RCI Hospitality and Ark Restaurants’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RCI Hospitality $165.75 million 1.25 $21.71 million $2.18 9.81
Ark Restaurants $159.99 million 0.41 $4.65 million N/A N/A

RCI Hospitality has higher revenue and earnings than Ark Restaurants.

Profitability

This table compares RCI Hospitality and Ark Restaurants’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RCI Hospitality 13.10% 13.75% 6.67%
Ark Restaurants 2.91% 8.01% 4.15%

Dividends

RCI Hospitality pays an annual dividend of $0.12 per share and has a dividend yield of 0.6%. Ark Restaurants pays an annual dividend of $1.00 per share and has a dividend yield of 5.3%. RCI Hospitality pays out 5.5% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current ratings and target prices for RCI Hospitality and Ark Restaurants, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RCI Hospitality 0 0 1 0 3.00
Ark Restaurants 0 0 0 0 N/A

RCI Hospitality currently has a consensus price target of $34.00, suggesting a potential upside of 59.03%. Given RCI Hospitality’s higher probable upside, research analysts plainly believe RCI Hospitality is more favorable than Ark Restaurants.

Summary

RCI Hospitality beats Ark Restaurants on 10 of the 14 factors compared between the two stocks.

RCI Hospitality Company Profile

RCI Hospitality Holdings, Inc., through its subsidiaries, engages in the hospitality and related businesses in the United States. It operates in two segments, Nightclubs and Bombshells. The company owns and/or operates upscale adult nightclubs serving primarily businessmen and professionals under the Rick's Cabaret, Jaguars Club, Tootsie's Cabaret, XTC Cabaret, Club Onyx, Hoops Cabaret and Sports Bar, Foxy's Cabaret, Vivid Cabaret, Downtown Cabaret, Temptations Adult Cabaret, Scarlett's Cabaret, Silver City Cabaret, Cabaret East, and The Seville brands. It also operates restaurants/sports bars under the Bombshells brand; and dance clubs under the Studio 80 brand. As of November 30, 2017, the company operated 45 units that offers live adult entertainment, and/or restaurant and bar operations. In addition, it owns a national industry convention and tradeshow; two national industry trade publications; and two national industry award shows, as well as approximately a dozen industry and social media Websites. The company was formerly known as Rick's Cabaret International, Inc. and changed its name to RCI Hospitality Holdings, Inc. in August 2014. RCI Hospitality Holdings, Inc. was founded in 1982 and is based in Houston, Texas.

Ark Restaurants Company Profile

Ark Restaurants Corp., through its subsidiaries, owns and operates restaurants and bars in the United States. As of September 29, 2018, it owned and/or operated 20 restaurants and bars, including 5 facilities located in New York City; 2 in Washington, D.C.; 5 in Las Vegas, Nevada; 3 in Atlantic City, New Jersey; 1 in the Faneuil Hall Marketplace in Boston, Massachusetts; 2 on the east coast of Florida; and 2 on the gulf coast of Alabama, as well as had 19 fast food concepts and catering operations. The company was founded in 1983 and is based in New York, New York.

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