Good Times Restaurants (NASDAQ: GTIM) and Fiesta Restaurant Group (NASDAQ:FRGI) 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 earnings, analyst recommendations, dividends, risk, valuation, profitability and institutional ownership.

Insider & Institutional Ownership

32.7% of Good Times Restaurants shares are held by institutional investors. Comparatively, 94.1% of Fiesta Restaurant Group shares are held by institutional investors. 8.4% of Good Times Restaurants shares are held by insiders. Comparatively, 2.2% of Fiesta Restaurant Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Good Times Restaurants and Fiesta Restaurant Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Good Times Restaurants 0 0 1 0 3.00
Fiesta Restaurant Group 1 5 1 0 2.00

Good Times Restaurants presently has a consensus price target of $6.00, indicating a potential upside of 103.39%. Fiesta Restaurant Group has a consensus price target of $23.40, indicating a potential upside of 47.17%. Given Good Times Restaurants’ stronger consensus rating and higher possible upside, research analysts plainly believe Good Times Restaurants is more favorable than Fiesta Restaurant Group.

Volatility and Risk

Good Times Restaurants has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Fiesta Restaurant Group has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500.

Profitability

This table compares Good Times Restaurants and Fiesta Restaurant Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Good Times Restaurants -2.25% -4.44% -3.35%
Fiesta Restaurant Group -2.75% 11.77% 6.95%

Valuation and Earnings

This table compares Good Times Restaurants and Fiesta Restaurant Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Good Times Restaurants $73.71 million 0.50 $2.12 million ($0.14) -21.07
Fiesta Restaurant Group $701.79 million 0.61 $69.79 million ($0.72) -22.08

Fiesta Restaurant Group has higher revenue and earnings than Good Times Restaurants. Fiesta Restaurant Group is trading at a lower price-to-earnings ratio than Good Times Restaurants, indicating that it is currently the more affordable of the two stocks.

Summary

Fiesta Restaurant Group beats Good Times Restaurants on 7 of the 12 factors compared between the two stocks.

Good Times Restaurants Company Profile

Good Times Restaurants Inc. operates and franchises Good Times Burgers & Frozen Custard (Good Times) restaurants and Bad Daddy’s Burger Bar concept (Bad Daddy’s). The Company operates through two segments: Good Times Burgers and Frozen Custard restaurants, and Bad Daddy’s Burger Bar restaurants. Good Times is a quick service restaurant concept. The menu of a Good Times restaurant includes hamburgers, cheeseburgers, chicken sandwiches, French fries, onion rings, soft drinks and frozen custard products. Its breakfast menu includes breakfast burritos, orange juice and coffee. Bad Daddy’s operates in the burger casual dining sector and is chef driven, full service, full bar concept. Its menu consists of burgers, salads, sandwiches and appetizers. Its bar focuses on local, craft microbrew beers and specialty cocktails. The Company operates through its subsidiaries, Good Times Drive Thru, Inc., BD of Colorado, LLC, Bad Daddy’s Franchise Development, LLC and Bad Daddy’s International, LLC.

Fiesta Restaurant Group Company Profile

Fiesta Restaurant Group, Inc. owns, operates and franchises two fast-casual restaurant brands, Pollo Tropical and Taco Cabana through its subsidiaries Pollo Operations, Inc., and its subsidiaries, and Pollo Franchise, Inc., (collectively Pollo Tropical) and Taco Cabana, Inc. and its subsidiaries (collectively Taco Cabana). The Company operates through the Pollo Tropical and Taco Cabana segments. The Company’s Pollo Tropical restaurants offer Caribbean menu items, featuring its bone-in chicken marinated in blend of tropical fruit juices and grilled over an open flame. The Company also offers catering for parties and corporate events. The Company’s Taco Cabana restaurants serves Mexican food, including flame-grilled steak and chicken fajitas served on sizzling iron skillets, quesadillas, hand-rolled flautas, enchiladas, burritos, tacos, fresh-made flour tortillas, customizable salads served in its Cabana Bowl, and its breakfast tacos.

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