Critical Survey: Dave & Buster’s Entertainment (PLAY) & Famous Dave’s of America (DAVE)

Dave & Buster’s Entertainment (NASDAQ:PLAY) and Famous Dave’s of America (NASDAQ:DAVE) are both small-cap retail/wholesale companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, dividends, profitability, valuation, institutional ownership and earnings.

Earnings & Valuation

This table compares Dave & Buster’s Entertainment and Famous Dave’s of America’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dave & Buster’s Entertainment $1.27 billion 1.40 $117.22 million $2.93 16.51
Famous Dave’s of America $54.89 million 0.95 $4.86 million N/A N/A

Dave & Buster’s Entertainment has higher revenue and earnings than Famous Dave’s of America.

Volatility and Risk

Dave & Buster’s Entertainment has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Famous Dave’s of America has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Dave & Buster’s Entertainment and Famous Dave’s of America, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dave & Buster’s Entertainment 0 0 11 0 3.00
Famous Dave’s of America 0 0 1 0 3.00

Dave & Buster’s Entertainment currently has a consensus target price of $64.30, suggesting a potential upside of 32.93%. Famous Dave’s of America has a consensus target price of $9.00, suggesting a potential upside of 59.29%. Given Famous Dave’s of America’s higher probable upside, analysts clearly believe Famous Dave’s of America is more favorable than Dave & Buster’s Entertainment.

Profitability

This table compares Dave & Buster’s Entertainment and Famous Dave’s of America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dave & Buster’s Entertainment 9.26% 27.71% 9.32%
Famous Dave’s of America 8.86% 26.14% 13.41%

Institutional & Insider Ownership

51.9% of Famous Dave’s of America shares are held by institutional investors. 3.4% of Dave & Buster’s Entertainment shares are held by insiders. Comparatively, 43.0% of Famous Dave’s of America shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Dave & Buster’s Entertainment pays an annual dividend of $0.60 per share and has a dividend yield of 1.2%. Famous Dave’s of America does not pay a dividend. Dave & Buster’s Entertainment pays out 20.5% of its earnings in the form of a dividend.

Summary

Dave & Buster’s Entertainment beats Famous Dave’s of America on 9 of the 14 factors compared between the two stocks.

About Dave & Buster’s Entertainment

Dave & Buster's Entertainment, Inc. owns and operates entertainment and dining venues for adults and families. Its venues offer a menu of entrées and appetizers, as well as a selection of non-alcoholic and alcoholic beverages; and an assortment of entertainment attractions centered on playing games and watching live sports, and other televised events. The company operates its venues under the Dave & Buster's name. As of April 02, 2019, it owned and operated 125 venues in 39 states, Puerto Rico, and Canada. The company was founded in 1982 and is headquartered in Dallas, Texas.

About Famous Dave’s of America

Famous Dave's of America, Inc. develops, owns, operates, and franchises barbeque restaurants under the Famous Dave's name. It offers smoked, barbequed, and grilled meats, as well as entrée items and delicious side dishes that are prepared using prepared proprietary seasonings, sauces, and mixes. The company operates full-service and counter-service restaurants. As of March 5, 2018, it owned 16 locations and franchised 135 restaurants in 32 states, the Commonwealth of Puerto Rico, Canada, and the United Arab Emirates. Famous Dave's of America, Inc. was founded in 1994 and is headquartered in Minnetonka, Minnesota.

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