Ark Restaurants (NASDAQ:ARKR) and Kona Grill (NASDAQ:KONA) are both small-cap retail/wholesale companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, earnings, risk, analyst recommendations, valuation and institutional ownership.

Profitability

This table compares Ark Restaurants and Kona Grill’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ark Restaurants 1.84% 9.32% 4.83%
Kona Grill -12.77% -239.30% -13.64%

Valuation & Earnings

This table compares Ark Restaurants and Kona Grill’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ark Restaurants $159.99 million 0.42 $4.65 million N/A N/A
Kona Grill $179.08 million 0.08 -$23.43 million N/A N/A

Ark Restaurants has higher earnings, but lower revenue than Kona Grill.

Dividends

Ark Restaurants pays an annual dividend of $1.00 per share and has a dividend yield of 5.1%. Kona Grill does not pay a dividend.

Analyst Ratings

This is a summary of current recommendations and price targets for Ark Restaurants and Kona Grill, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ark Restaurants 0 0 0 0 N/A
Kona Grill 0 0 1 0 3.00

Kona Grill has a consensus price target of $5.00, indicating a potential upside of 354.55%. Given Kona Grill’s higher probable upside, analysts plainly believe Kona Grill is more favorable than Ark Restaurants.

Institutional & Insider Ownership

22.9% of Ark Restaurants shares are owned by institutional investors. Comparatively, 11.8% of Kona Grill shares are owned by institutional investors. 41.6% of Ark Restaurants shares are owned by insiders. Comparatively, 31.5% of Kona Grill shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Ark Restaurants has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500. Comparatively, Kona Grill has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500.

Summary

Ark Restaurants beats Kona Grill on 9 of the 12 factors compared between the two stocks.

Ark Restaurants Company Profile

Ark Restaurants Corp., through its subsidiaries, owns and operates restaurants and bars in the United States. As of September 29, 2018, it owned and/or operated 20 restaurants and bars, including 5 facilities located in New York City; 2 in Washington, D.C.; 5 in Las Vegas, Nevada; 3 in Atlantic City, New Jersey; 1 in the Faneuil Hall Marketplace in Boston, Massachusetts; 2 on the east coast of Florida; and 2 on the gulf coast of Alabama, as well as had 19 fast food concepts and catering operations. The company was founded in 1983 and is based in New York, New York.

Kona Grill Company Profile

Kona Grill, Inc. owns and operates upscale casual restaurants under the Kona Grill brand name. As of December 31, 2017, it owned and operated 46 restaurants in 23 states of the United States and Puerto Rico; and 3 franchised restaurants in Mexico, the United Arab Emirates, and Canada. The company is based in Scottsdale, Arizona.

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