Fiesta Restaurant Group (FRGI) & Ruby Tuesday (NYSE:RT) Head-To-Head Contrast

Fiesta Restaurant Group (NASDAQ: FRGI) and Ruby Tuesday (NYSE:RT) are both small-cap retail/wholesale companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Insider and Institutional Ownership

97.0% of Fiesta Restaurant Group shares are owned by institutional investors. Comparatively, 77.2% of Ruby Tuesday shares are owned by institutional investors. 2.2% of Fiesta Restaurant Group shares are owned by company insiders. Comparatively, 4.8% of Ruby Tuesday shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and target prices for Fiesta Restaurant Group and Ruby Tuesday, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fiesta Restaurant Group 1 4 1 0 2.00
Ruby Tuesday 0 0 0 0 N/A

Fiesta Restaurant Group presently has a consensus price target of $22.60, indicating a potential upside of 19.58%. Given Fiesta Restaurant Group’s higher probable upside, research analysts clearly believe Fiesta Restaurant Group is more favorable than Ruby Tuesday.

Profitability

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

Net Margins Return on Equity Return on Assets
Fiesta Restaurant Group -3.40% 9.49% 5.57%
Ruby Tuesday -4.53% -13.05% -5.54%

Valuation & Earnings

This table compares Fiesta Restaurant Group and Ruby Tuesday’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fiesta Restaurant Group $711.77 million 0.72 $16.71 million ($0.86) -21.98
Ruby Tuesday $951.97 million 0.15 -$106.14 million ($1.27) -1.89

Fiesta Restaurant Group has higher earnings, but lower revenue than Ruby Tuesday. Fiesta Restaurant Group is trading at a lower price-to-earnings ratio than Ruby Tuesday, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Fiesta Restaurant Group has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500. Comparatively, Ruby Tuesday has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500.

Summary

Fiesta Restaurant Group beats Ruby Tuesday on 10 of the 13 factors compared between the two stocks.

Fiesta Restaurant Group Company Profile

Fiesta Restaurant Group, Inc. owns, operates and franchises two fast-casual restaurant brands, Pollo Tropical and Taco Cabana through its subsidiaries Pollo Operations, Inc., and its subsidiaries, and Pollo Franchise, Inc., (collectively Pollo Tropical) and Taco Cabana, Inc. and its subsidiaries (collectively Taco Cabana). The Company operates through the Pollo Tropical and Taco Cabana segments. The Company’s Pollo Tropical restaurants offer Caribbean menu items, featuring its bone-in chicken marinated in blend of tropical fruit juices and grilled over an open flame. The Company also offers catering for parties and corporate events. The Company’s Taco Cabana restaurants serves Mexican food, including flame-grilled steak and chicken fajitas served on sizzling iron skillets, quesadillas, hand-rolled flautas, enchiladas, burritos, tacos, fresh-made flour tortillas, customizable salads served in its Cabana Bowl, and its breakfast tacos.

Ruby Tuesday Company Profile

Ruby Tuesday, Inc. owns and operates Ruby Tuesday casual dining and Lime Fresh Mexican Grill (Lime Fresh) casual restaurants. The Company also franchises the Ruby Tuesday concept in selected domestic and international markets, and the Lime Fresh concept in selected domestic markets. Its segments include Ruby Tuesday concept and Lime Fresh concept. As of March 1, 2016, the Company operated 729 Ruby Tuesday restaurants in 44 states, 13 foreign countries, and Guam, and there were 16 Lime Fresh restaurants in two states. Of those restaurants, it owned and operated approximately 649 Ruby Tuesday restaurants and franchised over 80 Ruby Tuesday restaurants, which consisted of 28 domestic and 52 international restaurants. It also owned and operated over eight Lime Fresh restaurants and franchised eight Lime Fresh domestic restaurants. The Company’s corporate-owned and operated restaurants are concentrated primarily in the Southeast, Northeast, Mid-Atlantic and Midwest of the United States.

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