Luby’s (NYSE: LUB) and Cracker Barrel Old Country Store (NASDAQ:CBRL) are both retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitabiliy and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and recommmendations for Luby’s and Cracker Barrel Old Country Store, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Luby’s 0 0 0 0 N/A
Cracker Barrel Old Country Store 1 7 0 0 1.88

Cracker Barrel Old Country Store has a consensus target price of $163.88, suggesting a potential upside of 3.25%. Given Cracker Barrel Old Country Store’s higher probable upside, analysts plainly believe Cracker Barrel Old Country Store is more favorable than Luby’s.

Insider & Institutional Ownership

47.0% of Luby’s shares are owned by institutional investors. Comparatively, 89.2% of Cracker Barrel Old Country Store shares are owned by institutional investors. 35.2% of Luby’s shares are owned by insiders. Comparatively, 1.0% of Cracker Barrel Old Country Store shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Cracker Barrel Old Country Store pays an annual dividend of $4.80 per share and has a dividend yield of 3.0%. Luby’s does not pay a dividend. Cracker Barrel Old Country Store pays out 58.0% of its earnings in the form of a dividend. Cracker Barrel Old Country Store has raised its dividend for 7 consecutive years.

Valuation and Earnings

This table compares Luby’s and Cracker Barrel Old Country Store’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Luby’s $387.17 million 0.22 $13.97 million ($0.92) -3.13
Cracker Barrel Old Country Store $2.93 billion 1.30 $391.90 million $8.27 19.19

Cracker Barrel Old Country Store has higher revenue and earnings than Luby’s. Luby’s is trading at a lower price-to-earnings ratio than Cracker Barrel Old Country Store, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Luby’s and Cracker Barrel Old Country Store’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Luby’s -6.96% -4.89% -3.13%
Cracker Barrel Old Country Store 6.80% 35.27% 13.12%

Volatility and Risk

Luby’s has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Cracker Barrel Old Country Store has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500.

Summary

Cracker Barrel Old Country Store beats Luby’s on 11 of the 14 factors compared between the two stocks.

Luby’s Company Profile

Luby’s, Inc., is a multi-branded company operating in the restaurant industry and in the contract food services industry. The Company is managed through three segments: Company-owned restaurants, franchise operations, and Culinary Contract Services (CSS). The company-owned restaurants brands are Luby’s Cafeteria, Fuddruckers, and Cheeseburger in Paradise with a couple of non-core restaurant locations under other brand names. As of August 31, 2016, the Company owned and operated 175 restaurants, with 127 in Texas and the remainder in other states. The Company offers franchises for the Fuddruckers brand. As of August 31, 2016, the number of franchised restaurants were 113. Culinary Contract Services consists of contract arrangements to manage food services for clients operating in three lines of business: healthcare, higher education, and corporate dining. As of August 31, 2016, the Company had 24 Culinary Contract Services contracts.

Cracker Barrel Old Country Store Company Profile

Cracker Barrel Old Country Store, Inc. is engaged in the operation and development of the Cracker Barrel Old Country Store concept (Cracker Barrel). The Company’s segments include Restaurant and Retail. As of September 19, 2016, the Company operated 640 Cracker Barrel stores in 43 states. The format of its stores consists of a rustic old country-store design offering a restaurant menu that features home-style country food and a range of decorative and functional items, such as rocking chairs, holiday and seasonal gifts and toys, apparel, cookware and foods. Its restaurants offer home-style country cooking featuring of its own recipes. Its restaurants serve breakfast, lunch and dinner. Its breakfast items include juices, eggs, pancakes, grits, and a range of biscuit specialties. Its lunch and dinner items include country ham, chicken and dumplings, chicken fried chicken, meatloaf, fresh side items and specialty items, such as pinto beans and turnip greens.

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