DineEquity (NYSE: DIN) and One Group Hospitality (OTCMKTS:STKS) are both small-cap retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.

Valuation and Earnings

This table compares DineEquity and One Group Hospitality’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DineEquity $621.56 million 1.19 $234.57 million $4.48 9.15
One Group Hospitality $79.12 million 0.56 -$769,339.00 N/A N/A

DineEquity has higher revenue and earnings than One Group Hospitality.

Analyst Ratings

This is a summary of recent ratings and price targets for DineEquity and One Group Hospitality, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DineEquity 0 4 3 0 2.43
One Group Hospitality 0 0 0 0 N/A

DineEquity currently has a consensus target price of $57.00, indicating a potential upside of 39.06%. Given DineEquity’s higher probable upside, equities research analysts plainly believe DineEquity is more favorable than One Group Hospitality.

Dividends

DineEquity pays an annual dividend of $3.88 per share and has a dividend yield of 9.5%. One Group Hospitality does not pay a dividend. DineEquity pays out 86.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DineEquity has raised its dividend for 2 consecutive years.

Profitability

This table compares DineEquity and One Group Hospitality’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DineEquity 13.02% 38.34% 4.35%
One Group Hospitality -2.41% -14.95% -3.67%

Institutional and Insider Ownership

88.6% of DineEquity shares are held by institutional investors. 2.2% of DineEquity shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

DineEquity beats One Group Hospitality on 12 of the 13 factors compared between the two stocks.

DineEquity Company Profile

DineEquity, Inc., through its subsidiaries, owns and franchises the Applebee’s Neighborhood Grill & Bar (Applebee’s) concept in the bar and grill segment within the casual dining category of the restaurant industry, and owns, franchises and operates the International House of Pancakes (IHOP) concept in the family dining category of the restaurant industry. It operates through four segments: Franchise operations, Rental operations, Company restaurant operations and Financing operations. As of December 31, 2016, it had 3,749 restaurants. Applebee’s menu features a selection of grill and bar fare, such as appetizers, bar snacks, burgers, classic entrees and lighter fare, as well as cocktails, beers and desserts. As of December 31, 2016, IHOP franchise and area license restaurants were located in all 50 states within the United States, in the District of Columbia, in three United States territories and in 10 countries outside of the United States.

One Group Hospitality Company Profile

The ONE Group Hospitality, Inc., formerly Committed Capital Acquisition Corporation, is a hospitality company. The Company develops, owns and operates restaurants and lounges, and provides food and beverage services for hospitality venues, including hotels, casinos and other locations across the globe. It operates through three segments: owned STK units (STKs), F&B hospitality management agreements (F&B), and Other concepts (Other). Its STKs segment consists of leased restaurant locations. Its F&B segment consists of management agreements, in which the Company operates the food and beverage services in hotels or casinos and could include an STK. Its Other segment includes owned non-STK leased locations. Its restaurant brand is STK, a multi-unit steakhouse concept with locations in metropolitan cities around the globe. Its F&B hospitality management services include developing, managing and operating restaurants, bars, rooftop lounges, pools, banqueting and catering facilities.

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