Critical Comparison: Denny’s (NASDAQ:DENN) & GEN Restaurant Group (NASDAQ:GENK)

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

Institutional and Insider Ownership

85.1% of Denny’s shares are owned by institutional investors. Comparatively, 10.2% of GEN Restaurant Group shares are owned by institutional investors. 4.2% of Denny’s shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Denny’s	0	3	3	0	2.50
GEN Restaurant Group	0	0	4	0	3.00

Denny’s presently has a consensus price target of $11.75, suggesting a potential upside of 45.60%. GEN Restaurant Group has a consensus price target of $14.33, suggesting a potential upside of 43.76%. Given Denny’s’ higher possible upside, analysts clearly believe Denny’s is more favorable than GEN Restaurant Group.

Earnings and Valuation

This table compares Denny’s and GEN Restaurant Group’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Denny’s	$463.92 million	0.92	$19.94 million	$0.35	23.06
GEN Restaurant Group	$181.01 million	1.78	$8.41 million	N/A	N/A

Denny’s has higher revenue and earnings than GEN Restaurant Group.

Profitability

This table compares Denny’s and GEN Restaurant Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Denny’s	4.30%	-70.78%	6.97%
GEN Restaurant Group	2.46%	20.27%	2.84%

Summary

Denny’s beats GEN Restaurant Group on 7 of the 11 factors compared between the two stocks.

About Denny’s

Denny's Corporation, through its subsidiaries, owns and operates franchised full-service restaurant chains under the Denny's and Keke's Breakfast Cafe brands in the United States and internationally. The company was formerly known as Advantica Restaurant Group, Inc. and changed its name to Denny's Corporation in July 2002. Denny's Corporation was founded in 1953 and is headquartered in Spartanburg, South Carolina.

About GEN Restaurant Group

GEN Restaurant Group, Inc. operates restaurants in California, Arizona, Hawaii, Nevada, Texas, New York, and Florida. It offers meats, poultry, and seafood. The company was founded in 2011 and is based in Cerritos, California.