BJ’s Restaurants (NASDAQ: BJRI) and Famous Dave’s of America (NASDAQ:DAVE) are both small-cap retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitabiliy, valuation, institutional ownership, earnings, risk and dividends.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for BJ’s Restaurants and Famous Dave’s of America, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BJ’s Restaurants 2 7 1 0 1.90
Famous Dave’s of America 0 0 0 0 N/A

BJ’s Restaurants presently has a consensus price target of $39.25, indicating a potential upside of 12.30%. Given BJ’s Restaurants’ higher probable upside, equities analysts clearly believe BJ’s Restaurants is more favorable than Famous Dave’s of America.

Earnings and Valuation

This table compares BJ’s Restaurants and Famous Dave’s of America’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BJ’s Restaurants $1.01 billion 0.75 $126.57 million $1.83 19.10
Famous Dave’s of America $97.67 million 0.25 $2.90 million ($0.65) -5.31

BJ’s Restaurants 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 BJ’s Restaurants, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

94.5% of BJ’s Restaurants shares are held by institutional investors. Comparatively, 61.4% of Famous Dave’s of America shares are held by institutional investors. 6.8% of BJ’s Restaurants shares are held by insiders. Comparatively, 27.0% of Famous Dave’s of America shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares BJ’s Restaurants and Famous Dave’s of America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BJ’s Restaurants 4.29% 14.86% 6.21%
Famous Dave’s of America -4.59% 1.13% 0.44%

Risk & Volatility

BJ’s Restaurants has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, Famous Dave’s of America has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500.

Summary

BJ’s Restaurants beats Famous Dave’s of America on 10 of the 12 factors compared between the two stocks.

About BJ’s Restaurants

BJ’s Restaurants, Inc. owns and operates restaurants. The Company segment includes casual dining company-owned restaurants. Each of its restaurants is operated either as a BJ’s Restaurant & Brewhouse, a BJ’s Restaurant & Brewery, a BJ’s Pizza & Grill or a BJ’s Grill restaurant. The Company’s restaurants offer craft beers and other beers, as well as a selection of appetizers, entrees, pastas, burgers and sandwiches, specialty salads, and desserts, including its warm pizza cookie dessert, the Pizookie. As of February 27, 2017, the Company owned and operated 189 restaurants located in 24 states of Alabama, Arizona, Arkansas, California, Colorado, Florida, Indiana, Kansas, Kentucky, Louisiana, Maryland, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Virginia and Washington.

About Famous Dave’s of America

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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