Critical Review: Bloomin’ Brands (NASDAQ:BLMN) and Ruth’s Hospitality Group (NASDAQ:RUTH)

Bloomin’ Brands (NASDAQ:BLMN) and Ruth’s Hospitality Group (NASDAQ:RUTH) are both retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Valuation and Earnings

This table compares Bloomin’ Brands and Ruth’s Hospitality Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bloomin’ Brands $4.13 billion 0.49 $107.10 million $1.50 15.46
Ruth’s Hospitality Group $452.33 million 1.58 $41.68 million $1.39 17.44

Bloomin’ Brands has higher revenue and earnings than Ruth’s Hospitality Group. Bloomin’ Brands is trading at a lower price-to-earnings ratio than Ruth’s Hospitality Group, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

94.2% of Bloomin’ Brands shares are held by institutional investors. Comparatively, 83.5% of Ruth’s Hospitality Group shares are held by institutional investors. 4.4% of Bloomin’ Brands shares are held by insiders. Comparatively, 7.2% of Ruth’s Hospitality Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Bloomin’ Brands pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. Ruth’s Hospitality Group pays an annual dividend of $0.52 per share and has a dividend yield of 2.1%. Bloomin’ Brands pays out 26.7% of its earnings in the form of a dividend. Ruth’s Hospitality Group pays out 37.4% 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.

Analyst Recommendations

This is a breakdown of current recommendations for Bloomin’ Brands and Ruth’s Hospitality Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bloomin’ Brands 1 4 6 0 2.45
Ruth’s Hospitality Group 0 2 1 0 2.33

Bloomin’ Brands currently has a consensus price target of $21.89, suggesting a potential downside of 5.61%. Ruth’s Hospitality Group has a consensus price target of $24.67, suggesting a potential upside of 1.76%. Given Ruth’s Hospitality Group’s higher possible upside, analysts clearly believe Ruth’s Hospitality Group is more favorable than Bloomin’ Brands.

Volatility & Risk

Bloomin’ Brands has a beta of 0.31, indicating that its share price is 69% less volatile than the S&P 500. Comparatively, Ruth’s Hospitality Group has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500.

Profitability

This table compares Bloomin’ Brands and Ruth’s Hospitality Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bloomin’ Brands 2.75% 89.62% 4.26%
Ruth’s Hospitality Group 9.26% 45.15% 10.69%

Bloomin’ Brands Company Profile

Bloomin' Brands, Inc., through its subsidiaries, owns and operates casual, upscale casual, and fine dining restaurants in the United States and internationally. The company operates through two segments, U.S. and International. Its restaurant portfolio has four concepts, including Outback Steakhouse, a casual steakhouse restaurant; Carrabba's Italian Grill, a casual Italian restaurant; Bonefish Grill, an upscale casual seafood restaurant; and Fleming's Prime Steakhouse & Wine Bar, a contemporary steakhouse. As of December 31, 2017, the company owned and operated 1,075 restaurants and franchised 165 restaurants. Bloomin' Brands, Inc. was incorporated in 2006 and is headquartered in Tampa, Florida.

Ruth’s Hospitality Group Company Profile

Ruth's Hospitality Group, Inc., together with its subsidiaries, develops, operates, and franchises fine dining restaurants under the Ruth's Chris Steak House name. Its restaurants offer food and beverage products to special occasion diners and frequent customers, as well as business clientele. As of February 22, 2019, the company had approximately 150 company-owned and franchisee-owned restaurants worldwide. Ruth's Hospitality Group, Inc. was founded in 1965 and is headquartered in Winter Park, Florida.

Receive News & Ratings for Bloomin' Brands Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Bloomin' Brands and related companies with MarketBeat.com's FREE daily email newsletter.