Head-To-Head Contrast: Potbelly Corporation (PBPB) vs. Diversified Restaurant Holdings (SAUC)
Potbelly Corporation (NASDAQ: PBPB) and Diversified Restaurant Holdings (NASDAQ:SAUC) 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 earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.
Risk & Volatility
Potbelly Corporation has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, Diversified Restaurant Holdings has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500.
This table compares Potbelly Corporation and Diversified Restaurant Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Diversified Restaurant Holdings||-3.39%||-60.83%||-0.51%|
Valuation and Earnings
This table compares Potbelly Corporation and Diversified Restaurant Holdings’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Potbelly Corporation||$415.98 million||0.69||$39.72 million||$0.17||66.77|
|Diversified Restaurant Holdings||$166.70 million||0.34||$20.34 million||($0.22)||-9.64|
Potbelly Corporation has higher revenue and earnings than Diversified Restaurant Holdings. Diversified Restaurant Holdings is trading at a lower price-to-earnings ratio than Potbelly Corporation, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
72.8% of Potbelly Corporation shares are owned by institutional investors. Comparatively, 11.1% of Diversified Restaurant Holdings shares are owned by institutional investors. 9.6% of Potbelly Corporation shares are owned by company insiders. Comparatively, 48.2% of Diversified Restaurant Holdings shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This is a breakdown of recent recommendations and price targets for Potbelly Corporation and Diversified Restaurant Holdings, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Diversified Restaurant Holdings||0||0||1||0||3.00|
Potbelly Corporation presently has a consensus price target of $11.00, suggesting a potential downside of 3.08%. Diversified Restaurant Holdings has a consensus price target of $3.50, suggesting a potential upside of 65.09%. Given Diversified Restaurant Holdings’ stronger consensus rating and higher probable upside, analysts clearly believe Diversified Restaurant Holdings is more favorable than Potbelly Corporation.
Potbelly Corporation beats Diversified Restaurant Holdings on 8 of the 13 factors compared between the two stocks.
Potbelly Corporation Company Profile
Potbelly Corporation owns and operates Potbelly Sandwich Works sandwich shops in the United States. The Company has domestic and international franchise operations of Potbelly Sandwich Works sandwich shops. As of December 25, 2016, the Company operated Potbelly Sandwich Works sandwich shops in 29 states and the District of Columbia. As of December 25, 2016, the Company had a domestic base of 441 shops in 29 states and the District of Columbia. Of these, the company operated 411 shops, and franchisees operated 30 shops, as of December 25, 2016. As of December 25, 2016, the Company had 13 international franchised shops, which included 11 shops in the Middle East, a shop in the United Kingdom and a shop in Canada. As of December 25, 2016, the Company had domestic franchise shops in Arkansas, Iowa, Illinois, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, South Dakota, Tennessee, Texas and Virginia.
Diversified Restaurant Holdings Company Profile
Diversified Restaurant Holdings, Inc. (DRH) is a restaurant company. The Company is a franchisee of Buffalo Wild Wings (BWW).As of September 25, 2016, the Company operated 64 BWW restaurants, which are located in Michigan, Florida, Missouri, Illinois and Indiana. The BWW restaurants feature a range of menu items with a multimedia social environment, a bar and an open layout designed to create a dining experience for sports fans and families. Its guests have the option of watching various sporting events on projection screens or televisions. As of September 25, 2016, the BWW menu specialized in 21 sauces and seasonings with flavors ranging from Sweet BBQ to Blazin’. As of September 25, 2016, the restaurants offered 12 to 30 domestic and imported beers on tap, including several local or regional microbrews and a selection of bottled beer, wine and liquor.
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