Dave & Buster’s Entertainment (NASDAQ:PLAY – Get Free Report) and Wendy’s (NASDAQ:WEN – Get Free Report) 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 institutional ownership, analyst recommendations, earnings, valuation, profitability, risk and dividends.
Valuation & Earnings
This table compares Dave & Buster’s Entertainment and Wendy’s”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Dave & Buster’s Entertainment | $2.10 billion | 0.17 | -$48.70 million | ($1.89) | -5.52 |
| Wendy’s | $2.18 billion | 0.64 | $165.07 million | $0.78 | 9.37 |
Volatility and Risk
Dave & Buster’s Entertainment has a beta of 1.84, indicating that its share price is 84% more volatile than the S&P 500. Comparatively, Wendy’s has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500.
Profitability
This table compares Dave & Buster’s Entertainment and Wendy’s’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Dave & Buster’s Entertainment | -3.09% | -24.19% | -0.72% |
| Wendy’s | 6.77% | 136.46% | 3.14% |
Insider and Institutional Ownership
91.4% of Dave & Buster’s Entertainment shares are held by institutional investors. Comparatively, 86.0% of Wendy’s shares are held by institutional investors. 1.7% of Dave & Buster’s Entertainment shares are held by company insiders. Comparatively, 17.1% of Wendy’s shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Analyst Ratings
This is a breakdown of current ratings and price targets for Dave & Buster’s Entertainment and Wendy’s, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Dave & Buster’s Entertainment | 2 | 5 | 2 | 0 | 2.00 |
| Wendy’s | 6 | 13 | 3 | 0 | 1.86 |
Dave & Buster’s Entertainment currently has a consensus price target of $19.33, suggesting a potential upside of 85.36%. Wendy’s has a consensus price target of $8.06, suggesting a potential upside of 10.29%. Given Dave & Buster’s Entertainment’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Dave & Buster’s Entertainment is more favorable than Wendy’s.
Summary
Wendy’s beats Dave & Buster’s Entertainment on 10 of the 14 factors compared between the two stocks.
About Dave & Buster’s Entertainment
Dave & Buster's Entertainment, Inc. owns and operates entertainment and dining venues for adults and families. Its venues offer a menu of entrees and appetizers, as well as a selection of non-alcoholic and alcoholic beverages; and an assortment of entertainment attractions centered on playing games and watching live sports, and other televised events. The company operates its venues under the Dave & Buster's name. As of April 02, 2019, it owned and operated 125 venues in 39 states, Puerto Rico, and Canada. The company was founded in 1982 and is headquartered in Dallas, Texas.
About Wendy’s
The Wendy’s Co. engages in operating, developing, and franchising a system of quick-service restaurants. It operates through the following segments: Wendy’s U.S., Wendy’s International, and Global Real Estate and Development. The Wendy’s U.S. segment includes the operation and franchising of Wendy’s restaurants in the U.S. The Wendy’s International segment is involved in the operation and franchising of Wendy’s restaurants in countries and territories other than the U.S. The Global Real Estate and Development segment focuses on real estate activity for owned sites and sites leased from third parties. The company was founded by R. David Thomas on November 15, 1969 and is headquartered in Dublin, OH.
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