Del Frisco's Restaurant Group (NASDAQ: DFRG) and Good Times Restaurants (NASDAQ:GTIM) are both small-cap cyclical consumer goods & services companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, profitability, valuation and risk.

Volatility & Risk

Del Frisco's Restaurant Group has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, Good Times Restaurants has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Insider & Institutional Ownership

99.2% of Del Frisco's Restaurant Group shares are owned by institutional investors. Comparatively, 32.7% of Good Times Restaurants shares are owned by institutional investors. 2.7% of Del Frisco's Restaurant Group shares are owned by insiders. Comparatively, 8.4% of Good Times Restaurants shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and price targets for Del Frisco's Restaurant Group and Good Times Restaurants, 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
Good Times Restaurants 0 0 1 0 3.00

Del Frisco's Restaurant Group currently has a consensus target price of $18.75, suggesting a potential upside of 31.58%. Good Times Restaurants has a consensus target price of $6.00, suggesting a potential upside of 124.30%. Given Good Times Restaurants’ stronger consensus rating and higher possible upside, analysts plainly believe Good Times Restaurants is more favorable than Del Frisco's Restaurant Group.

Profitability

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

Net Margins Return on Equity Return on Assets
Del Frisco's Restaurant Group 2.54% 4.05% 2.47%
Good Times Restaurants -2.25% -4.44% -3.35%

Earnings & Valuation

This table compares Del Frisco's Restaurant Group and Good Times Restaurants’ top-line 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 25.45
Good Times Restaurants $73.71 million 0.45 $2.12 million ($0.14) -19.11

Del Frisco's Restaurant Group has higher revenue and earnings than Good Times Restaurants. Good Times Restaurants 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.

Summary

Del Frisco's Restaurant Group beats Good Times Restaurants on 10 of the 13 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 Good Times Restaurants

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.

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