Reviewing Ruth’s Hospitality Group (RUTH) & Chanticleer Holdings (NASDAQ:HOTR)

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

Risk and Volatility

Chanticleer Holdings has a beta of 1.43, suggesting that its share price is 43% more volatile than the S&P 500. Comparatively, Ruth’s Hospitality Group has a beta of 0.29, suggesting that its share price is 71% less volatile than the S&P 500.

Earnings and Valuation

This table compares Chanticleer Holdings and Ruth’s Hospitality Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Chanticleer Holdings $41.46 million 0.15 -$378,264.00 ($2.58) -0.94
Ruth’s Hospitality Group $396.96 million 1.52 $62.65 million $1.01 19.70

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

Insider & Institutional Ownership

26.0% of Chanticleer Holdings shares are owned by institutional investors. Comparatively, 85.6% of Ruth’s Hospitality Group shares are owned by institutional investors. 2.5% of Chanticleer Holdings shares are owned by company insiders. Comparatively, 6.7% of Ruth’s Hospitality Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Chanticleer Holdings -14.01% -38.80% -16.45%
Ruth’s Hospitality Group 7.97% 37.86% 15.69%

Dividends

Ruth’s Hospitality Group pays an annual dividend of $0.36 per share and has a dividend yield of 1.8%. Chanticleer Holdings does not pay a dividend. Ruth’s Hospitality Group pays out 35.6% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Chanticleer Holdings and Ruth’s Hospitality Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chanticleer Holdings 0 0 0 0 N/A
Ruth’s Hospitality Group 0 3 1 0 2.25

Ruth’s Hospitality Group has a consensus price target of $20.75, suggesting a potential upside of 4.27%. Given Ruth’s Hospitality Group’s higher possible upside, analysts plainly believe Ruth’s Hospitality Group is more favorable than Chanticleer Holdings.

Summary

Ruth’s Hospitality Group beats Chanticleer Holdings on 12 of the 14 factors compared between the two stocks.

About Chanticleer Holdings

Chanticleer Holdings, Inc. is engaged in the business of owning, operating and franchising fast casual dining concepts domestically and internationally. The Company’s brands include Hooters, American Burger Company (ABC), BGR: the Burger Joint (BGR), BT’s Burger Joint (BT), Little Big Burger (LBB) and Just Fresh. Hooters restaurants are casual beach-themed establishments featuring music, sports on large flat screens, and a menu that includes seafood, burgers, salads and Hooters original chicken wings. ABC is a fast casual dining chain located in North Carolina, South Carolina and New York. BGR consists of approximately 10 Company-owned locations in the United States and over 13 franchisee-operated locations in the United States and the Middle East. LBB consists of approximately eight locations in Oregon. Just Fresh consists of approximately seven Company owned locations in Charlotte, North Carolina.

About Ruth’s Hospitality Group

Ruth’s Hospitality Group, Inc. develops and operates fine dining restaurants under the name, Ruth’s Chris Steak House. The Company operates through two segments. As of December 25, 2016, the Company-owned steakhouse restaurant segment included 68 Ruth’s Chris Steak House restaurants and one Ruth’s Chris Steak House restaurant, and the franchise operations segment included 81 franchisee-owned Ruth’s Chris Steak House restaurants. Its restaurant’s menu features a selection of Prime and Choice grade steaks, and other offerings. Its menu also includes lamb chops, fish, shrimp, crab, chicken and lobster. Its Ruth’s Chris restaurants offer 10 to 13 appetizer items, including Orleans-style barbequed shrimp, mushrooms stuffed with crabmeat, lobster bisque and osso bucco ravioli. It also offers a range of potatoes and vegetables as side dishes. For dessert, creme brulee, white chocolate bread pudding, cheesecake, fresh seasonal berries with sweet cream sauce and other selections are available.

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