Nathan’s Famous (NATH) and Carrols Restaurant Group (TAST) Head to Head Analysis

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

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nathan’s Famous 0 0 0 0 N/A
Carrols Restaurant Group 0 0 3 0 3.00

Carrols Restaurant Group has a consensus target price of $19.00, indicating a potential upside of 47.52%. Given Carrols Restaurant Group’s higher possible upside, analysts clearly believe Carrols Restaurant Group is more favorable than Nathan’s Famous.

Dividends

Nathan’s Famous pays an annual dividend of $1.00 per share and has a dividend yield of 1.4%. Carrols Restaurant Group does not pay a dividend.

Insider & Institutional Ownership

40.4% of Nathan’s Famous shares are owned by institutional investors. Comparatively, 85.8% of Carrols Restaurant Group shares are owned by institutional investors. 32.4% of Nathan’s Famous shares are owned by company insiders. Comparatively, 4.6% of Carrols Restaurant Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Nathan’s Famous and Carrols Restaurant Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nathan’s Famous 4.34% -12.96% 12.03%
Carrols Restaurant Group 1.00% 8.53% 2.48%

Volatility & Risk

Nathan’s Famous has a beta of -0.25, indicating that its share price is 125% less volatile than the S&P 500. Comparatively, Carrols Restaurant Group has a beta of 0.31, indicating that its share price is 69% less volatile than the S&P 500.

Earnings and Valuation

This table compares Nathan’s Famous and Carrols Restaurant Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nathan’s Famous $104.20 million 2.94 $2.63 million N/A N/A
Carrols Restaurant Group $1.09 billion 0.43 $7.15 million $0.20 64.40

Carrols Restaurant Group has higher revenue and earnings than Nathan’s Famous.

Summary

Carrols Restaurant Group beats Nathan’s Famous on 8 of the 13 factors compared between the two stocks.

About Nathan’s Famous

Nathan's Famous, Inc., together with its subsidiaries, operates in the foodservice industry. The company owns and franchises restaurants under the Nathan's Famous brand name, as well as sells products bearing the Nathan's Famous trademarks through various channels of distribution. It also has license agreements for the manufacture, distribution, marketing, and sale of Nathan's Famous branded hot dogs, sausages, and corned beef products in refrigerated consumer packages to be resold through retail channels, such as supermarkets, groceries, mass merchandisers, and club stores; and other Nathan's Famous branded refrigerated meat products in consumer packages to be resold through retail channels. In addition, the company has license agreements to manufacture Nathan's Famous branded hot dog and sausage products in bulk for use in the food service industry; for supplying Nathan's Famous natural casing and skinless hot dogs in bulk for use in the Nathan's Famous restaurant system; to manufacture proprietary spices; to manufacture and sell various products, including mustard, salsa, sauerkraut, and pickles; to produce and sell French fries and onion rings for retail sale; and to manufacture and sell miniature bagel dogs, franks-in-a-blanket, and other hors d'oeuvres through club stores, supermarkets, and other retail food stores. Further, the company sells Nathan's products directly to end users or to various foodservice distributors, as well as provides Arthur Treacher's brand fish fillets. As of March 25, 2018, its restaurant system consisted of 5 company-owned units in the New York City metropolitan area; and 276 franchised units located in 20 states and 12 foreign countries. Nathan's Famous, Inc. was founded in 1916 and is based in Jericho, New York.

About Carrols Restaurant Group

Carrols Restaurant Group, Inc., through its subsidiaries, operates franchisee restaurants of Burger King in the United States. As of July 1, 2018, it owned and operated 807 BURGER KING restaurants. The company was founded in 1960 and is headquartered in Syracuse, New York.

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