Head-To-Head Analysis: Fiesta Restaurant Group (FRGI) and Ruby Tuesday (RT)

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Fiesta Restaurant Group and Ruby Tuesday, as provided 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 currently has a consensus price target of $22.60, suggesting a potential upside of 25.91%. Given Fiesta Restaurant Group’s higher probable upside, equities analysts clearly believe Fiesta Restaurant Group is more favorable than Ruby Tuesday.

Risk & Volatility

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

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%

Insider & Institutional Ownership

97.1% of Fiesta Restaurant Group shares are held by institutional investors. Comparatively, 77.2% of Ruby Tuesday shares are held by institutional investors. 2.2% of Fiesta Restaurant Group shares are held by insiders. Comparatively, 4.8% of Ruby Tuesday shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Fiesta Restaurant Group and Ruby Tuesday’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fiesta Restaurant Group $711.77 million 0.68 $16.71 million ($0.86) -20.87
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.

Summary

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

About Fiesta Restaurant Group

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.

About Ruby Tuesday

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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