Carrols Restaurant Group (NASDAQ: TAST) and Noodles & Co (NASDAQ:NDLS) are both small-cap retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, valuation, earnings, profitability and risk.

Volatility and Risk

Carrols Restaurant Group has a beta of 0.17, indicating that its share price is 83% less volatile than the S&P 500. Comparatively, Noodles & Co has a beta of -0.43, indicating that its share price is 143% less volatile than the S&P 500.

Valuation & Earnings

This table compares Carrols Restaurant Group and Noodles & Co’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Carrols Restaurant Group $943.58 million 0.49 $45.47 million $0.68 18.68
Noodles & Co $487.47 million 0.43 -$71.67 million ($3.04) -1.74

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Carrols Restaurant Group and Noodles & Co, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carrols Restaurant Group 0 0 3 0 3.00
Noodles & Co 1 5 1 0 2.00

Carrols Restaurant Group currently has a consensus price target of $15.33, indicating a potential upside of 20.73%. Noodles & Co has a consensus price target of $5.00, indicating a potential downside of 5.66%. Given Carrols Restaurant Group’s stronger consensus rating and higher possible upside, analysts plainly believe Carrols Restaurant Group is more favorable than Noodles & Co.

Insider and Institutional Ownership

88.5% of Carrols Restaurant Group shares are owned by institutional investors. Comparatively, 66.7% of Noodles & Co shares are owned by institutional investors. 5.6% of Carrols Restaurant Group shares are owned by insiders. Comparatively, 52.7% of Noodles & Co shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Carrols Restaurant Group and Noodles & Co’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carrols Restaurant Group 3.13% 4.61% 1.36%
Noodles & Co -17.41% -6.83% -1.19%

Summary

Carrols Restaurant Group beats Noodles & Co on 12 of the 13 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.

Noodles & Co Company Profile

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.

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