Del Frisco’s Restaurant Group (NASDAQ: DFRG) and Fiesta Restaurant Group (NASDAQ:FRGI) are both small-cap retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, profitability, risk, dividends, institutional ownership and valuation.

Risk & Volatility

Del Frisco’s Restaurant Group has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, Fiesta Restaurant Group has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500.

Earnings & Valuation

This table compares Del Frisco’s Restaurant Group and Fiesta Restaurant Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Del Frisco’s Restaurant Group $356.76 million 0.84 $41.74 million $0.56 25.36
Fiesta Restaurant Group $701.79 million 0.69 $69.79 million ($0.72) -25.21

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

Institutional and Insider Ownership

99.2% of Del Frisco’s Restaurant Group shares are held by institutional investors. Comparatively, 94.1% of Fiesta Restaurant Group shares are held by institutional investors. 2.4% of Del Frisco’s Restaurant Group 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 company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for Del Frisco’s Restaurant Group and Fiesta Restaurant Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Del Frisco’s Restaurant Group 0 3 2 0 2.40
Fiesta Restaurant Group 1 5 1 0 2.00

Del Frisco’s Restaurant Group presently has a consensus target price of $18.75, indicating a potential upside of 32.04%. Fiesta Restaurant Group has a consensus target price of $23.40, indicating a potential upside of 28.93%. Given Del Frisco’s Restaurant Group’s stronger consensus rating and higher possible upside, analysts plainly believe Del Frisco’s Restaurant Group is more favorable than Fiesta Restaurant Group.

Profitability

This table compares Del Frisco’s Restaurant Group and Fiesta Restaurant Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Del Frisco’s Restaurant Group 3.73% 7.39% 4.77%
Fiesta Restaurant Group -2.75% 11.77% 6.95%

Summary

Del Frisco’s Restaurant Group beats Fiesta Restaurant Group on 9 of the 14 factors compared between the two stocks.

About Del Frisco’s Restaurant Group

Del Frisco’s Restaurant Group, Inc. develops, owns and operates three contemporary, complementary restaurants: Del Frisco’s Double Eagle Steak House (Del Frisco’s), Sullivan’s Steakhouse (Sullivan’s) and Del Frisco’s Grille (the Grille). As of December 27, 2016, the Company operated 53 restaurants in 24 states and the District of Columbia in the United States. The Company’s segments include Del Frisco’s, Sullivan’s and the Grille. Del Frisco’s is a steakhouse concept in the United States. The Del Frisco’s brand’s menu includes the United States Department of Agriculture (USDA) Prime grade, wet-aged steaks hand-cut at the time of order and a range of other offerings, including prime lamb, fresh seafood, and signature side dishes and desserts. Each restaurant has a sommelier to guide diners through a wine list. As of December 27, 2016, the Company operated 12 Del Frisco’s steakhouses in nine states and the District of Columbia. Sullivan’s is a complementary concept to Del Frisco’s.

About Fiesta Restaurant Group

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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