Critical Analysis: Fiesta Restaurant Group (NASDAQ:FRGI) and Famous Dave’s of America (NASDAQ:DAVE)

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

Institutional and Insider Ownership

93.2% of Fiesta Restaurant Group shares are owned by institutional investors. Comparatively, 52.1% of Famous Dave’s of America shares are owned by institutional investors. 1.4% of Fiesta Restaurant Group shares are owned by company insiders. Comparatively, 43.0% of Famous Dave’s of America shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Fiesta Restaurant Group has a beta of -0.05, indicating that its stock price is 105% less volatile than the S&P 500. Comparatively, Famous Dave’s of America has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Fiesta Restaurant Group and Famous Dave’s of America, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fiesta Restaurant Group 0 1 2 0 2.67
Famous Dave’s of America 0 0 1 0 3.00

Fiesta Restaurant Group presently has a consensus target price of $26.50, indicating a potential upside of 130.84%. Famous Dave’s of America has a consensus target price of $8.00, indicating a potential upside of 61.94%. Given Fiesta Restaurant Group’s higher possible upside, analysts plainly believe Fiesta Restaurant Group is more favorable than Famous Dave’s of America.

Profitability

This table compares Fiesta Restaurant Group and Famous Dave’s of America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fiesta Restaurant Group 0.86% 6.55% 3.34%
Famous Dave’s of America 7.02% 21.63% 11.15%

Earnings and Valuation

This table compares Fiesta Restaurant Group and Famous Dave’s of America’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fiesta Restaurant Group $688.60 million 0.46 $7.79 million $0.60 19.13
Famous Dave’s of America $54.89 million 0.83 $4.86 million N/A N/A

Fiesta Restaurant Group has higher revenue and earnings than Famous Dave’s of America.

Summary

Famous Dave’s of America beats Fiesta Restaurant Group on 7 of the 13 factors compared between the two stocks.

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.

About Famous Dave’s of America

Famous Dave's of America, Inc. develops, owns, operates, and franchises barbeque restaurants under the Famous Dave's name. It offers smoked, barbequed, and grilled meats, as well as entrée items and delicious side dishes that are prepared using prepared proprietary seasonings, sauces, and mixes. The company operates full-service and counter-service restaurants. As of March 4, 2019, it owned 17 locations and franchised 124 restaurants in 33 states, the Commonwealth of Puerto Rico, Canada, and the United Arab Emirates. Famous Dave's of America, Inc. was founded in 1994 and is headquartered in Minnetonka, Minnesota.

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