Critical Analysis: Famous Dave’s of America (DAVE) versus Buffalo Wild Wings (BWLD)
Buffalo Wild Wings (NASDAQ: BWLD) and Famous Dave’s of America (NASDAQ:DAVE) are both retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitabiliy, institutional ownership and valuation.
Insider & Institutional Ownership
90.8% of Buffalo Wild Wings shares are owned by institutional investors. Comparatively, 61.4% of Famous Dave’s of America shares are owned by institutional investors. 1.2% of Buffalo Wild Wings shares are owned by company insiders. Comparatively, 27.0% of Famous Dave’s of America shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Volatility and Risk
Buffalo Wild Wings has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, Famous Dave’s of America has a beta of 1.43, indicating that its stock price is 43% more volatile than the S&P 500.
This table compares Buffalo Wild Wings and Famous Dave’s of America’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Buffalo Wild Wings||4.14%||16.55%||8.70%|
|Famous Dave’s of America||-4.59%||1.13%||0.44%|
This is a breakdown of recent ratings and recommmendations for Buffalo Wild Wings and Famous Dave’s of America, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Buffalo Wild Wings||3||13||7||0||2.17|
|Famous Dave’s of America||0||0||0||0||N/A|
Buffalo Wild Wings currently has a consensus target price of $160.39, indicating a potential upside of 24.38%. Given Buffalo Wild Wings’ higher possible upside, equities analysts plainly believe Buffalo Wild Wings is more favorable than Famous Dave’s of America.
Valuation and Earnings
This table compares Buffalo Wild Wings and Famous Dave’s of America’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Buffalo Wild Wings||$2.01 billion||1.04||$286.29 million||$4.62||27.91|
|Famous Dave’s of America||$97.67 million||0.26||$2.90 million||($0.65)||-5.62|
Buffalo Wild Wings has higher revenue and earnings than Famous Dave’s of America. Famous Dave’s of America is trading at a lower price-to-earnings ratio than Buffalo Wild Wings, indicating that it is currently the more affordable of the two stocks.
Buffalo Wild Wings beats Famous Dave’s of America on 10 of the 13 factors compared between the two stocks.
Buffalo Wild Wings Company Profile
Buffalo Wild Wings, Inc. is the owner, operator and franchisor of restaurants. As of December 25, 2016, the Company’s made-to-order menu items included 16 sauces and five seasonings, ranging from Sweet BBQ to Blazin. The Company’s restaurants offer 20 to 40 domestic and imported beers on tap, including craft brews, and a selection of bottled beers, wines and liquor. As of December 25, 2016, the Company had company-owned or franchised restaurants in all 50 states and two Canadian provinces. Its franchised restaurants also operate in Mexico, Saudi Arabia, Philippines, Panama and the United Arab Emirates. The Company operates Buffalo Wild Wings, R Taco and PizzaRev restaurants, as well as sells Buffalo Wild Wings and R Taco restaurant franchises. In addition to traditional and boneless chicken wings, the Company’s menu features a range of food items, including sharables, hamburgers, sandwiches, wraps, Buffalito soft tacos, and salads.
Famous Dave’s of America Company Profile
Famous Dave’s of America, Inc. (Famous Dave’s) operates restaurants. The Company’s restaurants, which offer full table service, feature wood-smoked and off-the-grill entree favorites that fit into the barbeque category. It has the Company-owned and franchise-operated restaurants in the United States, the Commonwealth of Puerto Rico, and Canada, and it operates within the industry segment of foodservice. It operates approximately 179 Famous Dave’s restaurants in over 33 states, the Commonwealth of Puerto Rico and Canada, including over 44 the Company-owned restaurants and approximately 135 franchise-operated restaurants. Each restaurant features a selection of hickory-smoked and off-the-grill barbecue favorites, such as flame-grilled St. Louis-style and baby back ribs, Texas beef brisket, Georgia chopped pork, country-roasted chicken, and signature sandwiches and salads. Its restaurants offer side items, such as corn bread, potato salad, coleslaw, Shack Fries and Wilbur Beans.
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