Head to Head Survey: FAT Brands (NASDAQ:FAT) versus Fiesta Restaurant Group (NASDAQ:FRGI)

FAT Brands (NASDAQ:FAT) and Fiesta Restaurant Group (NASDAQ:FRGI) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.

Institutional and Insider Ownership

0.8% of FAT Brands shares are held by institutional investors. Comparatively, 94.9% of Fiesta Restaurant Group shares are held by institutional investors. 2.8% of FAT Brands shares are held by company insiders. Comparatively, 1.4% of Fiesta Restaurant Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares FAT Brands and Fiesta Restaurant Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FAT Brands -12.37% -50.17% -3.99%
Fiesta Restaurant Group -10.65% 5.52% 2.15%

Earnings and Valuation

This table compares FAT Brands and Fiesta Restaurant Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FAT Brands $18.37 million 2.93 -$1.80 million N/A N/A
Fiesta Restaurant Group $688.60 million 0.42 $7.79 million $0.60 17.52

Fiesta Restaurant Group has higher revenue and earnings than FAT Brands.

Analyst Recommendations

This is a summary of current ratings and price targets for FAT Brands and Fiesta Restaurant Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FAT Brands 0 0 0 0 N/A
Fiesta Restaurant Group 0 0 1 0 3.00

Fiesta Restaurant Group has a consensus target price of $14.00, suggesting a potential upside of 33.21%. Given Fiesta Restaurant Group’s higher probable upside, analysts clearly believe Fiesta Restaurant Group is more favorable than FAT Brands.

Risk & Volatility

FAT Brands has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, Fiesta Restaurant Group has a beta of -0.03, indicating that its stock price is 103% less volatile than the S&P 500.

Summary

Fiesta Restaurant Group beats FAT Brands on 8 of the 11 factors compared between the two stocks.

About FAT Brands

FAT Brands Inc., a multi-brand franchising company, acquires, markets, and develops fast casual and casual dining restaurant concepts. As of April 22, 2019, it owned 7 restaurant brands, including Fatburger, Buffalo's Cafe, Buffalo's Express, Hurricane Grill & Wings, Yalla Mediterranean, Ponderosa Steakhouse, and Bonanza Steakhouse with approximately 300 locations open and 200 under development worldwide. The company was founded in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. is a subsidiary of Fog Cutter Capital Group Inc.

About Fiesta Restaurant Group

Fiesta Restaurant Group, Inc., through its subsidiaries, owns, operates, and franchises fast-casual restaurants. It operates its fast-casual restaurants under the Pollo Tropical and Taco Cabana brands. The company's Pollo Tropical restaurants offer fire-grilled and citrus marinated chicken, and other freshly prepared tropical inspired menu items; and Taco Cabana restaurants that provide Mexican inspired food made fresh by hand. As of December 30, 2018, it operated 139 Pollo Tropical restaurants in Florida; 162 company owned Taco Cabana restaurants; and franchised 30 Pollo Tropical restaurants in Puerto Rico, Panama, Guyana, Bahamas, and Florida, as well as franchised Taco Cabana restaurants 6 in New Mexico and 2 in Texas. The company was incorporated in 2011 and is headquartered in Dallas, Texas.

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