Comparing Ruth’s Hospitality Group (NASDAQ:RUTH) and Carrols Restaurant Group (NASDAQ:TAST)

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

Earnings & Valuation

This table compares Carrols Restaurant Group and Ruth’s Hospitality Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Carrols Restaurant Group $1.18 billion 0.31 $10.10 million $0.30 23.67
Ruth’s Hospitality Group $452.33 million 1.49 $41.68 million $1.39 16.47

Ruth’s Hospitality Group has lower revenue, but higher earnings than Carrols Restaurant Group. Ruth’s Hospitality Group is trading at a lower price-to-earnings ratio than Carrols Restaurant Group, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Carrols Restaurant Group has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, Ruth’s Hospitality Group has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Carrols Restaurant Group and Ruth’s Hospitality Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carrols Restaurant Group 0 0 4 0 3.00
Ruth’s Hospitality Group 0 2 1 0 2.33

Carrols Restaurant Group currently has a consensus price target of $11.38, suggesting a potential upside of 60.21%. Ruth’s Hospitality Group has a consensus price target of $24.67, suggesting a potential upside of 7.76%. Given Carrols Restaurant Group’s stronger consensus rating and higher probable upside, analysts clearly believe Carrols Restaurant Group is more favorable than Ruth’s Hospitality Group.

Insider & Institutional Ownership

63.5% of Carrols Restaurant Group shares are owned by institutional investors. Comparatively, 83.8% of Ruth’s Hospitality Group shares are owned by institutional investors. 22.0% of Carrols Restaurant Group shares are owned by company insiders. Comparatively, 7.2% of Ruth’s Hospitality Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Carrols Restaurant Group -1.48% -3.00% -0.59%
Ruth’s Hospitality Group 9.26% 45.15% 10.69%

Summary

Ruth’s Hospitality Group beats Carrols Restaurant Group on 8 of the 14 factors compared between the two stocks.

Carrols Restaurant Group Company Profile

Carrols Restaurant Group, Inc., through its subsidiaries, operates franchisee restaurants of Burger King in the United States. As of May 7, 2019, it owned and operated 1,010 Burger King and 55 Popeyes restaurants in 23 states.. The company was founded in 1960 and is headquartered in Syracuse, New York.

Ruth’s Hospitality Group Company Profile

Ruth's Hospitality Group, Inc., together with its subsidiaries, develops, operates, and franchises fine dining restaurants under the Ruth's Chris Steak House name. Its restaurants offer food and beverage products to special occasion diners and frequent customers, as well as business clientele. As of February 22, 2019, the company had approximately 150 company-owned and franchisee-owned restaurants worldwide. Ruth's Hospitality Group, Inc. was founded in 1965 and is headquartered in Winter Park, Florida.

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