Financial Analysis: US Foods (USFD) vs. Rave Restaurant Group (RAVE)

US Foods (NYSE:USFD) and Rave Restaurant Group (NASDAQ:RAVE) are both consumer staples companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.

Valuation and Earnings

This table compares US Foods and Rave Restaurant Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
US Foods $24.15 billion 0.27 $444.29 million $0.91 32.54
Rave Restaurant Group $15.12 million 1.25 $1.91 million N/A N/A

US Foods has higher revenue and earnings than Rave Restaurant Group.

Profitability

This table compares US Foods and Rave Restaurant Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
US Foods 2.25% 12.66% 3.92%
Rave Restaurant Group N/A 69.63% 26.79%

Analyst Ratings

This is a summary of recent ratings and recommmendations for US Foods and Rave Restaurant Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
US Foods 0 5 8 0 2.62
Rave Restaurant Group 0 0 0 0 N/A

US Foods currently has a consensus price target of $38.14, suggesting a potential upside of 28.82%. Given US Foods’ higher probable upside, analysts clearly believe US Foods is more favorable than Rave Restaurant Group.

Risk and Volatility

US Foods has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500. Comparatively, Rave Restaurant Group has a beta of 0.01, suggesting that its share price is 99% less volatile than the S&P 500.

Insider and Institutional Ownership

3.6% of Rave Restaurant Group shares are held by institutional investors. 0.6% of US Foods shares are held by company insiders. Comparatively, 51.2% of Rave Restaurant Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

US Foods beats Rave Restaurant Group on 6 of the 11 factors compared between the two stocks.

US Foods Company Profile

US Foods Holding Corp., through its subsidiary, US Foods, Inc., markets and distributes fresh, frozen, and dry food and non-food products to foodservice customers in the United States. Its customers include independently owned single and multi-unit restaurants, regional concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities, and retail locations. The company was formerly known as USF Holding Corp. and changed its name to US Foods Holding Corp. in February 2016. US Foods Holding Corp. is headquartered in Rosemont, Illinois.

Rave Restaurant Group Company Profile

Rave Restaurant Group, Inc., together with its subsidiaries, operates and franchises pizza buffet, delivery/carry-out (delco), and express restaurants under the Pizza Inn trademark. It operates in two segments, Franchising and Food and Supply Distribution; and Company-Owned Restaurants. The company's buffet restaurants, which are located in free standing buildings or strip centers in retail developments that offer dine-in, carryout, and catering services, as well as delivery services. Its delco restaurants provide delivery and carryout services that are located in shopping centers or other in-line retail developments. The company's Express restaurants serve customers through various non-traditional points of sale that are located in convenience stores, food courts, college campuses, airport terminals, travel plazas, athletic facilities, or other commercial facilities. Rave Restaurant Group, Inc. also operates and franchises fast casual restaurants under the Pie Five Pizza Company or Pie Five trademark. As of September 25, 2017, it owned, operated, and franchised approximately 300 Pie Five Pizza Co. and Pizza Inn restaurants in the United States and internationally. The company was formerly known as Pizza Inn Holdings, Inc. and changed its name to Rave Restaurant Group, Inc. in January 2015. Rave Restaurant Group, Inc. was founded in 1958 and is based in The Colony, Texas.

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