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

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Brinker International $3.15 billion 0.50 $435.24 million $2.99 10.81
Famous Dave’s of America $95.23 million 0.34 $3.05 million ($0.85) -5.47

Brinker International has higher revenue and earnings than Famous Dave’s of America. Famous Dave’s of America is trading at a lower price-to-earnings ratio than Brinker International, indicating that it is currently the more affordable of the two stocks.

Profitability

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

Net Margins Return on Equity Return on Assets
Brinker International 4.79% -31.46% 11.30%
Famous Dave’s of America -6.19% 0.70% 0.26%

Volatility & Risk

Brinker International has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500. Comparatively, Famous Dave’s of America has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Brinker International and Famous Dave’s of America, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brinker International 1 11 3 0 2.13
Famous Dave’s of America 0 0 0 0 N/A

Brinker International presently has a consensus price target of $44.73, suggesting a potential upside of 38.39%. Given Brinker International’s higher possible upside, equities research analysts plainly believe Brinker International is more favorable than Famous Dave’s of America.

Dividends

Brinker International pays an annual dividend of $1.36 per share and has a dividend yield of 4.2%. Famous Dave’s of America does not pay a dividend. Brinker International pays out 45.5% of its earnings in the form of a dividend. Famous Dave’s of America has increased its dividend for 6 consecutive years.

Insider & Institutional Ownership

62.4% of Famous Dave’s of America shares are held by institutional investors. 1.8% of Brinker International shares are held by company insiders. Comparatively, 27.0% of Famous Dave’s of America shares are held 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.

Summary

Brinker International beats Famous Dave’s of America on 9 of the 16 factors compared between the two stocks.

About Brinker International

Brinker International, Inc. is engaged in the ownership, operation, development, and franchising of the Chili’s Grill & Bar (Chili’s) and Maggiano’s Little Italy (Maggiano’s) restaurant brands. The Company’s Chili’s operates Bar & Grill category of casual dining. Chili’s menu features authentic Fresh Mex and Fresh Tex cuisine, including signature items, such as Baby Back Ribs smoked in-house, Hand-Crafted Burgers served with house-made garlic dill pickles, Mix and Match Fajitas, Tableside Guacamole and house-made Chips and Salsa. Maggiano’s is a full-service, casual dining Italian restaurant brand. Its Maggiano’s restaurants feature individual and family-style menus, and its restaurants also has banquet facilities designed to host party business or social events. The Company owns, operates or franchises restaurants, which include approximately 1,650 restaurants in the United States, over 30 countries and approximately two territories outside of the United States.

About Famous Dave’s of America

Famous Dave’s of America, Inc. (Famous Dave’s) operates restaurants. The Company’s restaurants, which offer full table service, feature wood-smoked and off-the-grill entree favorites that fit into the barbeque category. It has the Company-owned and franchise-operated restaurants in the United States, the Commonwealth of Puerto Rico, and Canada, and it operates within the industry segment of foodservice. It operates approximately 179 Famous Dave’s restaurants in over 33 states, the Commonwealth of Puerto Rico and Canada, including over 44 the Company-owned restaurants and approximately 135 franchise-operated restaurants. Each restaurant features a selection of hickory-smoked and off-the-grill barbecue favorites, such as flame-grilled St. Louis-style and baby back ribs, Texas beef brisket, Georgia chopped pork, country-roasted chicken, and signature sandwiches and salads. Its restaurants offer side items, such as corn bread, potato salad, coleslaw, Shack Fries and Wilbur Beans.

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