FAT Brands (NASDAQ:FATBP – Get Free Report) and Ruth’s Hospitality Group (NASDAQ:RUTH – Get Free Report) are both consumer cyclical companies, but which is the better business? We will compare the two companies based on the strength of their valuation, earnings, dividends, analyst recommendations, risk, profitability and institutional ownership.
Institutional and Insider Ownership
87.3% of Ruth’s Hospitality Group shares are owned by institutional investors. 6.0% of Ruth’s Hospitality Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares FAT Brands and Ruth’s Hospitality Group’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| FAT Brands | $415.51 million | N/A | N/A | N/A | N/A |
| Ruth’s Hospitality Group | $505.86 million | 1.36 | $38.62 million | $1.20 | 17.91 |
Analyst Recommendations
This is a breakdown of current ratings and target prices for FAT Brands and Ruth’s Hospitality Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| FAT Brands | 0 | 0 | 0 | 0 | N/A |
| Ruth’s Hospitality Group | 0 | 2 | 0 | 0 | 2.00 |
Ruth’s Hospitality Group has a consensus price target of $22.50, suggesting a potential upside of 4.70%. Given Ruth’s Hospitality Group’s higher possible upside, analysts plainly believe Ruth’s Hospitality Group is more favorable than FAT Brands.
Profitability
This table compares FAT Brands and Ruth’s Hospitality Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| FAT Brands | N/A | N/A | N/A |
| Ruth’s Hospitality Group | 7.66% | 32.00% | 8.63% |
Dividends
FAT Brands pays an annual dividend of $2.06 per share and has a dividend yield of 13.5%. Ruth’s Hospitality Group pays an annual dividend of $0.64 per share and has a dividend yield of 3.0%. Ruth’s Hospitality Group pays out 53.3% of its earnings in the form of a dividend. Ruth’s Hospitality Group has raised its dividend for 1 consecutive years.
Summary
Ruth’s Hospitality Group beats FAT Brands on 8 of the 10 factors compared between the two stocks.
About FAT Brands
FAT Brands Inc., a multi-brand restaurant company, acquires, develops, markets, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts worldwide. It owns restaurant brands, including Round Table Pizza, Marble Slab Creamery, Great American Cookies, Hot Dog on a Stick, Pretzelmaker, Fazoli's, Fatburger, Johnny Rockets, Elevation Burger, Yalla Mediterranean, Buffalo's Cafe and Buffalo's Express, Hurricane Grill & Wings, Ponderosa Steakhouse / Bonanza Steakhouse, Native Grill & Wings, and Twin Peaks. The company was incorporated in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. operates as a subsidiary of Fog Cutter Holdings, LLC.
About Ruth’s Hospitality Group
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 clients. The company was formerly known as Ruth's Chris Steak House, Inc. and changed its name to Ruth's Hospitality Group, Inc. in May 2008. Ruth's Hospitality Group, Inc. was founded in 1965 and is headquartered in Winter Park, Florida.
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