Comparing Bowlero (NYSE:BOWL) & RCI Hospitality (NASDAQ:RICK)

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

Risk & Volatility

Bowlero has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500. Comparatively, RCI Hospitality has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500.

Profitability

This table compares Bowlero and RCI Hospitality’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bowlero	-6.63%	-31.58%	1.31%
RCI Hospitality	-1.48%	-1.74%	-0.72%

Institutional and Insider Ownership

68.1% of Bowlero shares are held by institutional investors. Comparatively, 53.8% of RCI Hospitality shares are held by institutional investors. 79.9% of Bowlero shares are held by insiders. Comparatively, 11.4% of RCI Hospitality 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.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Bowlero and RCI Hospitality, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bowlero	0	0	0	0	0.00
RCI Hospitality	1	0	0	0	1.00

Dividends

Bowlero pays an annual dividend of $0.22 per share and has a dividend yield of 3.3%. RCI Hospitality pays an annual dividend of $0.32 per share and has a dividend yield of 1.0%. Bowlero pays out -36.1% of its earnings in the form of a dividend. RCI Hospitality pays out -78.0% 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. RCI Hospitality has increased its dividend for 4 consecutive years.

Earnings & Valuation

This table compares Bowlero and RCI Hospitality”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bowlero	$1.19 billion	0.82	-$83.58 million	($0.61)	-10.82
RCI Hospitality	$279.43 million	0.85	$10.81 million	($0.41)	-75.73

RCI Hospitality has lower revenue, but higher earnings than Bowlero. RCI Hospitality is trading at a lower price-to-earnings ratio than Bowlero, indicating that it is currently the more affordable of the two stocks.

Summary

RCI Hospitality beats Bowlero on 9 of the 15 factors compared between the two stocks.

About Bowlero

Bowlero Corp. operates bowling entertainment centers under the AMF, Bowlmor Lanes, and Bowlero brand names. The company also provides hosting and overseeing professional and non-professional bowling tournaments and related broadcasting. It operates bowling centers in the United States, Mexico, and Canada. The company is headquartered in Mechanicsville, Virginia.

About RCI Hospitality

RCI Hospitality Holdings, Inc., through its subsidiaries, engages in the hospitality and related businesses in the United States. It operates in Nightclubs, Bombshells, and Media Group segments. The company’s wholly-owned subsidiaries own 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, Scarlett's Cabaret, Temptations Adult Cabaret, Foxy's Cabaret, Vivid Cabaret, Downtown Cabaret, Cabaret East, The Seville, Silver City Cabaret, and Kappa Men's Club. Wholly-owned subsidiaries also operate restaurants and sports bars under the Bombshells Restaurant & Bar brand; and dance clubs under the Studio 80 brand. As of February 11, 2019, the company operated 46 units, including 39 nightclub units and 7 Bombshell units. In addition, it owns two national industry trade publications serving the adult nightclubs industry and the adult retail products industry; a national industry convention and tradeshow; and two national industry award shows, as well as approximately a dozen industry and social media Websites. The company founded in 1983 as Rick's Cabaret International, Inc., changed its name to RCI Hospitality Holdings, Inc. in August 2014, and is based in Houston, Texas.