Carrols Restaurant Group (NASDAQ: TAST) and Del Taco Restaurants (NASDAQ:TACO) 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, valuation, analyst recommendations, risk, profitability, institutional ownership and earnings.

Valuation & Earnings

This table compares Carrols Restaurant Group and Del Taco Restaurants’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Carrols Restaurant Group $999.03 million 0.40 $80.24 million $0.72 15.69
Del Taco Restaurants $468.58 million 1.05 $67.62 million $0.56 22.61

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

Risk and Volatility

Carrols Restaurant Group has a beta of 0.03, meaning that its share price is 97% less volatile than the S&P 500. Comparatively, Del Taco Restaurants has a beta of -0.2, meaning that its share price is 120% less volatile than the S&P 500.

Profitability

This table compares Carrols Restaurant Group and Del Taco Restaurants’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carrols Restaurant Group 3.44% 6.33% 1.86%
Del Taco Restaurants 4.78% 5.89% 3.08%

Insider & Institutional Ownership

86.7% of Carrols Restaurant Group shares are held by institutional investors. Comparatively, 69.9% of Del Taco Restaurants shares are held by institutional investors. 5.6% of Carrols Restaurant Group shares are held by insiders. Comparatively, 14.6% of Del Taco Restaurants shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for Carrols Restaurant Group and Del Taco Restaurants, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carrols Restaurant Group 0 0 2 0 3.00
Del Taco Restaurants 0 1 4 0 2.80

Carrols Restaurant Group currently has a consensus price target of $15.50, indicating a potential upside of 37.17%. Del Taco Restaurants has a consensus price target of $16.40, indicating a potential upside of 29.54%. Given Carrols Restaurant Group’s stronger consensus rating and higher possible upside, analysts clearly believe Carrols Restaurant Group is more favorable than Del Taco Restaurants.

Summary

Carrols Restaurant Group beats Del Taco Restaurants on 9 of the 14 factors compared between the two stocks.

Carrols Restaurant Group Company Profile

Carrols Restaurant Group, Inc. is a holding company and conducts all of its operations through its subsidiary, Carrols Corporation (Carrols) and Carrols’ subsidiary, Carrols LLC. The Company is a restaurant company and Burger King franchisee in the United States. As of January 1, 2017, the Company had owned and operated 753 Burger King restaurants under the name Burger King in 16 Northeastern, Midwestern and Southeastern states. Burger King restaurants feature the flame-broiled Whopper sandwich, as well as a range of hamburgers, chicken and other specialty sandwiches, French fries, salads, breakfast items, hot dogs, snacks, smoothies, frappes and other offerings. The Company’s Burger King restaurants are located in various states, such as Illinois, Indiana, Kentucky, Maine, Massachusetts, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Vermont, Virginia and West Virginia.

Del Taco Restaurants Company Profile

Del Taco Restaurants, Inc. is an operator and franchisor of restaurants featuring made-to-order cuisine, including both Mexican inspired and American classic dishes. As of January 3, 2017, the Company operated 551 Del Taco restaurants. The Company’s menu offers a combination of Mexican-inspired food, such as tacos and burritos, and American classics, such as Double Del cheeseburgers, crinkle-cut fries and milkshakes. The Company’s menu features items, such as its Platos plated meals, Epic Burritos, Handcrafted Ensaladas and Fresca Bowls, as well as items on its Buck & Under Menu. As of January 3, 2017, the Company had 310 Company-operated and 241 franchise-operated restaurants. The Platos menu offering consists of individually plated meals complete with an entree, two sides, and chips and salsa. The Company’s menu also includes quesadillas, bowls and handcrafted ensaladas, as well as burgers and fries.

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