Cracker Barrel Old Country Store (NASDAQ: CBRL) and Diversified Restaurant Holdings (NASDAQ:SAUC) are both retail/wholesale companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Profitability

This table compares Cracker Barrel Old Country Store and Diversified Restaurant Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cracker Barrel Old Country Store 6.90% 35.49% 13.26%
Diversified Restaurant Holdings -3.39% -60.83% -0.51%

Analyst Ratings

This is a summary of current recommendations for Cracker Barrel Old Country Store and Diversified Restaurant Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cracker Barrel Old Country Store 1 7 0 0 1.88
Diversified Restaurant Holdings 0 0 1 0 3.00

Cracker Barrel Old Country Store currently has a consensus target price of $161.00, indicating a potential upside of 4.58%. Diversified Restaurant Holdings has a consensus target price of $3.50, indicating a potential upside of 75.00%. Given Diversified Restaurant Holdings’ stronger consensus rating and higher possible upside, analysts plainly believe Diversified Restaurant Holdings is more favorable than Cracker Barrel Old Country Store.

Valuation and Earnings

This table compares Cracker Barrel Old Country Store and Diversified Restaurant Holdings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cracker Barrel Old Country Store $2.93 billion 1.26 $399.48 million $8.38 18.37
Diversified Restaurant Holdings $166.70 million 0.32 $20.34 million ($0.22) -9.09

Cracker Barrel Old Country Store has higher revenue and earnings than Diversified Restaurant Holdings. Diversified Restaurant Holdings is trading at a lower price-to-earnings ratio than Cracker Barrel Old Country Store, indicating that it is currently the more affordable of the two stocks.

Dividends

Cracker Barrel Old Country Store pays an annual dividend of $4.80 per share and has a dividend yield of 3.1%. Diversified Restaurant Holdings does not pay a dividend. Cracker Barrel Old Country Store pays out 57.3% of its earnings in the form of a dividend. Diversified Restaurant Holdings has increased its dividend for 7 consecutive years.

Risk and Volatility

Cracker Barrel Old Country Store has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500. Comparatively, Diversified Restaurant Holdings has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500.

Institutional & Insider Ownership

85.8% of Cracker Barrel Old Country Store shares are owned by institutional investors. Comparatively, 11.1% of Diversified Restaurant Holdings shares are owned by institutional investors. 1.0% of Cracker Barrel Old Country Store shares are owned by insiders. Comparatively, 48.2% of Diversified Restaurant Holdings shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Cracker Barrel Old Country Store beats Diversified Restaurant Holdings on 9 of the 16 factors compared between the two stocks.

Cracker Barrel Old Country Store Company Profile

Cracker Barrel Old Country Store, Inc. is engaged in the operation and development of the Cracker Barrel Old Country Store concept (Cracker Barrel). The Company’s segments include Restaurant and Retail. As of September 19, 2016, the Company operated 640 Cracker Barrel stores in 43 states. The format of its stores consists of a rustic old country-store design offering a restaurant menu that features home-style country food and a range of decorative and functional items, such as rocking chairs, holiday and seasonal gifts and toys, apparel, cookware and foods. Its restaurants offer home-style country cooking featuring of its own recipes. Its restaurants serve breakfast, lunch and dinner. Its breakfast items include juices, eggs, pancakes, grits, and a range of biscuit specialties. Its lunch and dinner items include country ham, chicken and dumplings, chicken fried chicken, meatloaf, fresh side items and specialty items, such as pinto beans and turnip greens.

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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