Nathan’s Famous (NASDAQ:NATH – Get Free Report) and Ark Restaurants (NASDAQ:ARKR – Get Free Report) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.
Institutional & Insider Ownership
66.5% of Nathan’s Famous shares are held by institutional investors. Comparatively, 32.0% of Ark Restaurants shares are held by institutional investors. 30.7% of Nathan’s Famous shares are held by insiders. Comparatively, 37.5% of Ark Restaurants shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Nathan’s Famous and Ark Restaurants’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Nathan’s Famous | 11.78% | -187.25% | 34.31% |
| Ark Restaurants | -2.04% | -10.61% | -2.58% |
Volatility and Risk
Nathan’s Famous has a beta of 0.25, suggesting that its stock price is 75% less volatile than the S&P 500. Comparatively, Ark Restaurants has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500.
Valuation & Earnings
This table compares Nathan’s Famous and Ark Restaurants”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Nathan’s Famous | $162.06 million | 2.58 | $20.02 million | $4.83 | 21.13 |
| Ark Restaurants | $165.75 million | 0.10 | -$11.47 million | ($0.88) | -5.12 |
Nathan’s Famous has higher earnings, but lower revenue than Ark Restaurants. Ark Restaurants is trading at a lower price-to-earnings ratio than Nathan’s Famous, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent ratings and target prices for Nathan’s Famous and Ark Restaurants, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Nathan’s Famous | 0 | 0 | 1 | 0 | 3.00 |
| Ark Restaurants | 1 | 0 | 0 | 0 | 1.00 |
Summary
Nathan’s Famous beats Ark Restaurants on 9 of the 13 factors compared between the two stocks.
About Nathan’s Famous
Nathan’s Famous is a restaurant and branded-food company best known for its hot dogs. Founded by Nathan Handwerker in Coney Island, New York, in 1916, the company has built its brand around the original Coney Island restaurant and its hot dogs. The company operates and franchises restaurants, while also licensing the Nathan’s Famous name for products sold through grocery retailers and foodservice distributors. Its offerings include hot dogs and other prepared foods, along with restaurant items such as fries and burgers.
About Ark Restaurants
Ark Restaurants Corp. owns and operates a portfolio of restaurants, bars and other food-service venues in the United States. Its establishments span a range of dining formats, including full-service restaurants, casual dining locations, steakhouses, bars and limited-service food concepts. The company serves a variety of cuisines and customer segments, from everyday dining to destination and entertainment-oriented venues. Ark Restaurants’ operations have historically been concentrated in major hospitality and tourism markets, including New York City, Washington, D.C., and Las Vegas, Nevada, with additional locations in other U.S. markets.
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