Vale (NYSE:VALE) & FAT Brands (NASDAQ:FATBB) Financial Contrast

FAT Brands (NASDAQ:FATBB) and Vale (NYSE:VALE) are both materials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Insider & Institutional Ownership

21.9% of Vale shares are held by institutional investors. 59.9% of FAT Brands shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
FAT Brands	-39.33%	N/A	-17.57%
Vale	5.11%	19.87%	8.58%

Volatility & Risk

FAT Brands has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, Vale has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500.

Dividends

FAT Brands pays an annual dividend of $0.14 per share and has a dividend yield of 15.8%. Vale pays an annual dividend of $0.44 per share and has a dividend yield of 3.3%. FAT Brands pays out -1.0% of its earnings in the form of a dividend. Vale pays out 89.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FAT Brands is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares FAT Brands and Vale”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FAT Brands	$574.14 million	0.03	-$189.85 million	($13.35)	-0.07
Vale	$41.24 billion	1.48	$2.35 billion	$0.49	27.43

Vale has higher revenue and earnings than FAT Brands. FAT Brands is trading at a lower price-to-earnings ratio than Vale, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for FAT Brands and Vale, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FAT Brands	1	0	0	0	1.00
Vale	1	12	2	1	2.19

Vale has a consensus price target of $15.96, indicating a potential upside of 18.76%. Given Vale’s stronger consensus rating and higher possible upside, analysts clearly believe Vale is more favorable than FAT Brands.

Summary

Vale beats FAT Brands on 13 of the 17 factors compared between the two stocks.

About FAT Brands

FAT Brands Inc., a multi-brand restaurant franchising company, acquires, develops, markets, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts worldwide. It owns restaurant brands, including Round Table Pizza, Marble Slab Creamery, Great American Cookies, Hot Dog on a Stick, Pretzelmaker, Fazoli's, Fatburger, Johnny Rockets, Elevation Burger, Yalla Mediterranean, Buffalo's Cafe and Buffalo's Express, Hurricane Grill & Wings, Ponderosa Steakhouse/Bonanza Steakhouse, Native Grill & Wings, Smokey Bones, and Twin Peaks. The company was incorporated in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. is a subsidiary of Fog Cutter Holdings, LLC.

About Vale

Vale S.A., together with its subsidiaries, produces and sells iron ore and iron ore pellets for use as raw materials in steelmaking in Brazil and internationally. The company operates through Iron Solutions and Energy Transition Materials segments. The Iron Solutions segment produces and extracts iron ore and pellets, manganese, and other ferrous products; and provides related logistic services. The Energy Transition Materials segment produces and extracts nickel used to produce stainless steel, electric vehicles, and metal alloys; and its by-products, such as gold, silver, cobalt, precious metals, platinum, and others, as well as copper used in the construction sector to produce pipes and electrical wires. The company was formerly known as Companhia Vale do Rio Doce and changed its name to Vale S.A. in May 2009. Vale S.A. was founded in 1942 and is headquartered in Rio de Janeiro, Brazil.