Contrasting First Watch Restaurant Group (NASDAQ:FWRG) & Dine Brands Global (NYSE:DIN)

First Watch Restaurant Group (NASDAQ:FWRG) and Dine Brands Global (NYSE:DIN) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, dividends, valuation, profitability, risk, earnings and institutional ownership.

Insider & Institutional Ownership

96.1% of First Watch Restaurant Group shares are held by institutional investors. Comparatively, 92.8% of Dine Brands Global shares are held by institutional investors. 6.1% of First Watch Restaurant Group shares are held by insiders. Comparatively, 6.7% of Dine Brands Global shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares First Watch Restaurant Group and Dine Brands Global’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Watch Restaurant Group	1.45%	3.10%	1.09%
Dine Brands Global	0.43%	-19.01%	3.14%

Analyst Recommendations

This is a summary of recent recommendations and price targets for First Watch Restaurant Group and Dine Brands Global, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Watch Restaurant Group	0	2	8	2	3.00
Dine Brands Global	1	9	0	0	1.90

First Watch Restaurant Group presently has a consensus target price of $18.00, suggesting a potential upside of 33.93%. Dine Brands Global has a consensus target price of $33.25, suggesting a potential downside of 9.48%. Given First Watch Restaurant Group’s stronger consensus rating and higher possible upside, research analysts clearly believe First Watch Restaurant Group is more favorable than Dine Brands Global.

Volatility & Risk

First Watch Restaurant Group has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, Dine Brands Global has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500.

Earnings & Valuation

This table compares First Watch Restaurant Group and Dine Brands Global”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Watch Restaurant Group	$1.22 billion	0.68	$19.43 million	$0.32	42.00
Dine Brands Global	$879.30 million	0.51	$17.10 million	$0.36	102.03

First Watch Restaurant Group has higher revenue and earnings than Dine Brands Global. First Watch Restaurant Group is trading at a lower price-to-earnings ratio than Dine Brands Global, indicating that it is currently the more affordable of the two stocks.

Summary

First Watch Restaurant Group beats Dine Brands Global on 12 of the 15 factors compared between the two stocks.

About First Watch Restaurant Group

First Watch Restaurant Group operates restaurants specializing in breakfast, brunch and lunch. Its First Watch restaurants serve made-to-order meals, including eggs, pancakes, sandwiches, salads and other daytime fare, with an emphasis on fresh ingredients. The company was founded in 1983 and is headquartered in Bradenton, Florida. It has expanded its restaurant operations across the United States and became a publicly traded company in 2021. First Watch is led by President and Chief Executive Officer Chris Tomasso.

About Dine Brands Global

Dine Brands Global, Inc. is a franchisor and full-service restaurant company that operates a portfolio of well-known dining concepts. Its primary brands are Applebee’s Neighborhood Grill + Bar, which offers casual American dining, and IHOP, which specializes in pancakes, breakfast foods and other all-day meals. The company also owns Fuzzy’s Taco Shop, a fast-casual Mexican restaurant brand acquired in 2022. Dine Brands generally operates through a franchise-based business model. Independent franchisees own and operate most restaurants under the company’s brands, while Dine Brands provides brand management, restaurant development support, marketing, training, technology and other services.