Reviewing Rave Restaurant Group (RAVE) and Domino’s Pizza (DPZ)

Rave Restaurant Group (NASDAQ:RAVE) and Domino’s Pizza (NYSE:DPZ) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, dividends and risk.

Dividends

Domino’s Pizza pays an annual dividend of $2.20 per share and has a dividend yield of 0.8%. Rave Restaurant Group does not pay a dividend. Domino’s Pizza pays out 41.2% of its earnings in the form of a dividend. Domino’s Pizza has raised its dividend for 4 consecutive years.

Risk & Volatility

Rave Restaurant Group has a beta of 0.01, meaning that its share price is 99% less volatile than the S&P 500. Comparatively, Domino’s Pizza has a beta of 0.22, meaning that its share price is 78% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Rave Restaurant Group N/A 69.63% 26.79%
Domino’s Pizza 10.60% -11.92% 38.83%

Valuation and Earnings

This table compares Rave Restaurant Group and Domino’s Pizza’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rave Restaurant Group $15.12 million 1.24 $1.91 million N/A N/A
Domino’s Pizza $2.79 billion 4.01 $277.90 million $5.34 50.34

Domino’s Pizza has higher revenue and earnings than Rave Restaurant Group.

Institutional & Insider Ownership

3.6% of Rave Restaurant Group shares are owned by institutional investors. Comparatively, 93.8% of Domino’s Pizza shares are owned by institutional investors. 51.7% of Rave Restaurant Group shares are owned by company insiders. Comparatively, 4.0% of Domino’s Pizza shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Rave Restaurant Group and Domino’s Pizza, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rave Restaurant Group 0 0 0 0 N/A
Domino’s Pizza 0 8 13 0 2.62

Domino’s Pizza has a consensus target price of $272.86, indicating a potential upside of 1.52%. Given Domino’s Pizza’s higher possible upside, analysts plainly believe Domino’s Pizza is more favorable than Rave Restaurant Group.

Summary

Domino’s Pizza beats Rave Restaurant Group on 11 of the 14 factors compared between the two stocks.

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.

Domino’s Pizza Company Profile

Domino's Pizza, Inc., through its subsidiaries, operates as a pizza delivery company in the United States and internationally. It operates through three segments: Domestic Stores, International Franchise, and Supply Chain. The company offers pizzas under the Domino's Pizza brand name through company-owned and franchised Domino's Pizza stores. As of June 18, 2018 it operated approximately 15,000 stores in approximately 85 markets. Domino's Pizza, Inc. was founded in 1960 and is headquartered in Ann Arbor, Michigan.

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