Dave & Buster’s Entertainment (NASDAQ:PLAY – Get Free Report) and Lucky Strike Entertainment (NYSE:LUCK – Get Free Report) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.
Valuation and Earnings
This table compares Dave & Buster’s Entertainment and Lucky Strike Entertainment”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Dave & Buster’s Entertainment | $2.08 billion | 0.12 | -$48.70 million | ($2.57) | -2.75 |
| Lucky Strike Entertainment | $1.25 billion | 0.45 | -$35.78 million | ($0.34) | -12.14 |
Lucky Strike Entertainment has lower revenue, but higher earnings than Dave & Buster’s Entertainment. Lucky Strike Entertainment is trading at a lower price-to-earnings ratio than Dave & Buster’s Entertainment, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Dave & Buster’s Entertainment and Lucky Strike Entertainment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Dave & Buster’s Entertainment | -4.26% | -51.87% | -1.29% |
| Lucky Strike Entertainment | -2.87% | N/A | -1.05% |
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Dave & Buster’s Entertainment and Lucky Strike Entertainment, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Dave & Buster’s Entertainment | 2 | 5 | 2 | 0 | 2.00 |
| Lucky Strike Entertainment | 3 | 6 | 4 | 0 | 2.08 |
Dave & Buster’s Entertainment presently has a consensus target price of $17.33, indicating a potential upside of 145.17%. Lucky Strike Entertainment has a consensus target price of $8.17, indicating a potential upside of 97.88%. Given Dave & Buster’s Entertainment’s higher probable upside, research analysts plainly believe Dave & Buster’s Entertainment is more favorable than Lucky Strike Entertainment.
Risk & Volatility
Dave & Buster’s Entertainment has a beta of 1.92, indicating that its share price is 92% more volatile than the S&P 500. Comparatively, Lucky Strike Entertainment has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.
Insider & Institutional Ownership
91.4% of Dave & Buster’s Entertainment shares are held by institutional investors. Comparatively, 68.1% of Lucky Strike Entertainment shares are held by institutional investors. 1.7% of Dave & Buster’s Entertainment shares are held by company insiders. Comparatively, 84.2% of Lucky Strike Entertainment shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Dividends
Dave & Buster’s Entertainment pays an annual dividend of $0.64 per share and has a dividend yield of 9.1%. Lucky Strike Entertainment pays an annual dividend of $0.24 per share and has a dividend yield of 5.8%. Dave & Buster’s Entertainment pays out -24.9% of its earnings in the form of a dividend. Lucky Strike Entertainment pays out -70.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Summary
Lucky Strike Entertainment beats Dave & Buster’s Entertainment on 10 of the 16 factors compared between the two stocks.
About Dave & Buster’s Entertainment
Dave & Buster's Entertainment, Inc. owns and operates entertainment and dining venues for adults and families. Its venues offer a menu of entrees and appetizers, as well as a selection of non-alcoholic and alcoholic beverages; and an assortment of entertainment attractions centered on playing games and watching live sports, and other televised events. The company operates its venues under the Dave & Buster's name. As of April 02, 2019, it owned and operated 125 venues in 39 states, Puerto Rico, and Canada. The company was founded in 1982 and is headquartered in Dallas, Texas.
About Lucky Strike Entertainment
Lucky Strike Entertainment Corp. engages in operating bowling centers. It offers entertainment concepts with lounge seating, arcades, food and beverage offerings, and hosting and overseeing professional and non-professional bowling tournaments and related broadcasting. The company was founded by Thomas F. Shannon in 1997 and is headquartered in Mechanicsville, VA.
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