Diversified Restaurant Holdings (NASDAQ: SAUC) and Bojangles’ (NASDAQ:BOJA) are both small-cap retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, profitability, analyst recommendations, institutional ownership and dividends.

Earnings & Valuation

This table compares Diversified Restaurant Holdings and Bojangles”s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Diversified Restaurant Holdings $166.70 million 0.33 $20.34 million ($0.22) -9.45
Bojangles’ $538.50 million 0.94 $79.81 million $0.95 14.47

Bojangles’ has higher revenue and earnings than Diversified Restaurant Holdings. Diversified Restaurant Holdings is trading at a lower price-to-earnings ratio than Bojangles’, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Diversified Restaurant Holdings and Bojangles”s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Diversified Restaurant Holdings -3.39% -60.83% -0.51%
Bojangles’ 6.70% 17.05% 6.47%

Institutional & Insider Ownership

11.1% of Diversified Restaurant Holdings shares are owned by institutional investors. Comparatively, 91.3% of Bojangles’ shares are owned by institutional investors. 49.6% of Diversified Restaurant Holdings shares are owned by company insiders. Comparatively, 55.3% of Bojangles’ shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Diversified Restaurant Holdings has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500. Comparatively, Bojangles’ has a beta of 1.97, suggesting that its stock price is 97% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Diversified Restaurant Holdings and Bojangles’, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Diversified Restaurant Holdings 0 0 1 0 3.00
Bojangles’ 0 5 3 0 2.38

Diversified Restaurant Holdings presently has a consensus target price of $3.50, suggesting a potential upside of 68.27%. Bojangles’ has a consensus target price of $19.29, suggesting a potential upside of 40.26%. Given Diversified Restaurant Holdings’ stronger consensus rating and higher possible upside, research analysts plainly believe Diversified Restaurant Holdings is more favorable than Bojangles’.

Summary

Bojangles’ beats Diversified Restaurant Holdings on 11 of the 13 factors compared between the two stocks.

About Diversified Restaurant Holdings

Diversified Restaurant Holdings, Inc. (DRH) is a restaurant company. The Company is a franchisee of Buffalo Wild Wings (BWW).As of September 25, 2016, the Company operated 64 BWW restaurants, which are located in Michigan, Florida, Missouri, Illinois and Indiana. The BWW restaurants feature a range of menu items with a multimedia social environment, a bar and an open layout designed to create a dining experience for sports fans and families. Its guests have the option of watching various sporting events on projection screens or televisions. As of September 25, 2016, the BWW menu specialized in 21 sauces and seasonings with flavors ranging from Sweet BBQ to Blazin’. As of September 25, 2016, the restaurants offered 12 to 30 domestic and imported beers on tap, including several local or regional microbrews and a selection of bottled beer, wine and liquor.

About Bojangles’

Bojangles’, Inc. is a restaurant operator and franchisor. The Company offers food made from its Southern recipes. The Company’s menu includes its made-from-scratch, buttermilk biscuits baked fresh every 20 minutes; its fresh, never-frozen bone-in fried chicken; its fixin’s; its Bo-Smart menu featuring items, such as salads, grilled chicken sandwiches, roasted chicken bites and fat-free green beans; its freshly baked and delicious sweets menu, and its Legendary Iced Tea. The Company’s food is offered a la carte and in combos. The Company’s chicken, fixin’s, biscuits and Legendary Iced Tea may also be ordered in boxes or family meals, and larger combinations may be offered as tailgate specials or may be packaged in its Big Bo Box. The Company offers Southern style mac ‘n cheese made from two cheeses; fat-free green beans; cole slaw, and mashed potatoes with gravy. Its menu also features salads, sandwiches and its whole meat Roasted Chicken Bites.

Receive News & Ratings for Diversified Restaurant Holdings Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Diversified Restaurant Holdings Inc. and related companies with MarketBeat.com's FREE daily email newsletter.