Noodles & (NASDAQ: NDLS) and Red Robin Gourmet Burgers (NASDAQ:RRGB) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, analyst recommendations, risk, valuation, institutional ownership and earnings.

Volatility & Risk

Noodles & has a beta of -0.53, suggesting that its share price is 153% less volatile than the S&P 500. Comparatively, Red Robin Gourmet Burgers has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500.

Insider & Institutional Ownership

65.7% of Noodles & shares are owned by institutional investors. 52.7% of Noodles & shares are owned by insiders. Comparatively, 2.7% of Red Robin Gourmet Burgers shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for Noodles & and Red Robin Gourmet Burgers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Noodles & 1 5 0 0 1.83
Red Robin Gourmet Burgers 0 5 6 0 2.55

Noodles & currently has a consensus price target of $4.75, suggesting a potential upside of 5.56%. Red Robin Gourmet Burgers has a consensus price target of $71.60, suggesting a potential upside of 10.84%. Given Red Robin Gourmet Burgers’ stronger consensus rating and higher possible upside, analysts clearly believe Red Robin Gourmet Burgers is more favorable than Noodles &.

Profitability

This table compares Noodles & and Red Robin Gourmet Burgers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Noodles & -17.42% -10.25% -2.10%
Red Robin Gourmet Burgers 0.64% 8.00% 3.18%

Earnings and Valuation

This table compares Noodles & and Red Robin Gourmet Burgers’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Noodles & $481.59 million 0.38 $12.41 million ($3.19) -1.41
Red Robin Gourmet Burgers $1.32 billion 0.63 $131.93 million $0.64 100.94

Red Robin Gourmet Burgers has higher revenue and earnings than Noodles &. Noodles & is trading at a lower price-to-earnings ratio than Red Robin Gourmet Burgers, indicating that it is currently the more affordable of the two stocks.

Summary

Red Robin Gourmet Burgers beats Noodles & on 11 of the 13 factors compared between the two stocks.

About Noodles &

Noodles & Company develops and operates fast casual restaurants. The Company’s menu includes a range of cooked-to-order dishes, including noodles and pasta, soups, salads, sandwiches and appetizers. The Company has approximately 490 restaurants, including 420 Company-owned and 70 franchised locations, across 40 states, the District of Columbia and one Canadian province. The Company offers over 30 globally inspired Asian, Mediterranean and American dishes together on a single menu. The Company offers approximately 10 fresh vegetables and six proteins, including marinated steak, naturally raised pork, chicken, meatballs, shrimp and organic tofu. The Company offers Kids Meals, which includes sides, such as broccoli, carrots, fruit, applesauce and a portion of its housemade rice crispy treat. The Company’s restaurants’ locations include Arizona, California, Colorado, Delaware, New York, North Dakota, Ohio, Texas, Utah, Virginia, Washington and Wisconsin.

About Red Robin Gourmet Burgers

Red Robin Gourmet Burgers, Inc., together with its subsidiaries, primarily develops, operates, and franchises full-service restaurants in North America and focuses on serving selection of gourmet burgers. The Company’s menu features a line of gourmet burgers, which it makes from ground beef, as well as its line of Red’s Tavern Double Burgers and its Red Robin’s line of half-pound Angus beef burgers with various toppings. The Company also offers burgers made from chicken breasts, fish fillets, turkey patties, as well as vegetarian and vegan options. The Company offered a selection of buns, including ciabatta, gluten free, sesame, onion, whole grain, jalapeno and lettuce wraps a range of toppings, including fresh guacamole, house made barbeque sauces, aiolis, grilled pineapple, crispy onion straws, sauteed mushrooms, fried jalapenos, bruschetta salsa, coleslaw, eight different cheese choices and a fried egg, as of December 25, 2016.

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