Famous Dave’s of America (DAVE) vs. FAT Brands (FAT) Critical Comparison

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Famous Dave’s of America (NASDAQ:DAVE) and FAT Brands (NASDAQ:FAT) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, dividends, earnings and profitability.

Earnings and Valuation

This table compares Famous Dave’s of America and FAT Brands’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Famous Dave’s of America $54.89 million 0.72 $4.86 million N/A N/A
FAT Brands $18.37 million 2.91 -$1.80 million N/A N/A

Famous Dave’s of America has higher revenue and earnings than FAT Brands.

Profitability

This table compares Famous Dave’s of America and FAT Brands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Famous Dave’s of America 7.02% 21.98% 12.40%
FAT Brands -9.79% -36.75% -4.14%

Analyst Ratings

This is a breakdown of recent ratings for Famous Dave’s of America and FAT Brands, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Famous Dave’s of America 0 0 1 0 3.00
FAT Brands 0 0 0 0 N/A

Famous Dave’s of America currently has a consensus price target of $8.00, suggesting a potential upside of 87.79%. Given Famous Dave’s of America’s higher possible upside, analysts plainly believe Famous Dave’s of America is more favorable than FAT Brands.

Insider & Institutional Ownership

51.2% of Famous Dave’s of America shares are held by institutional investors. Comparatively, 1.5% of FAT Brands shares are held by institutional investors. 43.0% of Famous Dave’s of America shares are held by insiders. Comparatively, 1.3% of FAT Brands shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

FAT Brands pays an annual dividend of $0.48 per share and has a dividend yield of 10.6%. Famous Dave’s of America does not pay a dividend.

Volatility & Risk

Famous Dave’s of America has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, FAT Brands has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500.

Summary

Famous Dave’s of America beats FAT Brands on 9 of the 12 factors compared between the two stocks.

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 4, 2019, it owned 17 locations and franchised 124 restaurants in 33 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.

About FAT Brands

FAT Brands Inc., a multi-brand franchising company, acquires, markets, and develops fast casual and casual dining restaurant concepts. As of April 22, 2019, it owned 7 restaurant brands, including Fatburger, Buffalo's Cafe, Buffalo's Express, Hurricane Grill & Wings, Yalla Mediterranean, Ponderosa Steakhouse, and Bonanza Steakhouse with approximately 300 locations open and 200 under development worldwide. The company was founded in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. is a subsidiary of Fog Cutter Capital Group Inc.

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