Good Times Restaurants (NASDAQ: GTIM) and Ruby Tuesday (NYSE:RT) 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, earnings, valuation, risk, profitability, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Good Times Restaurants and Ruby Tuesday, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Good Times Restaurants 0 0 1 0 3.00
Ruby Tuesday 0 0 0 0 N/A

Good Times Restaurants presently has a consensus price target of $6.00, suggesting a potential upside of 135.29%. Given Good Times Restaurants’ higher probable upside, research analysts plainly believe Good Times Restaurants is more favorable than Ruby Tuesday.

Insider & Institutional Ownership

32.3% of Good Times Restaurants shares are owned by institutional investors. Comparatively, 77.2% of Ruby Tuesday shares are owned by institutional investors. 8.4% of Good Times Restaurants shares are owned by insiders. Comparatively, 4.8% of Ruby Tuesday shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Good Times Restaurants has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, Ruby Tuesday has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500.

Profitability

This table compares Good Times Restaurants and Ruby Tuesday’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Good Times Restaurants -2.85% -6.05% -4.37%
Ruby Tuesday -4.53% -13.05% -5.54%

Earnings & Valuation

This table compares Good Times Restaurants and Ruby Tuesday’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Good Times Restaurants $79.08 million 0.40 -$2.25 million ($0.18) -14.17
Ruby Tuesday $951.97 million 0.15 -$106.14 million ($1.27) -1.89

Good Times Restaurants has higher earnings, but lower revenue than Ruby Tuesday. Good Times Restaurants is trading at a lower price-to-earnings ratio than Ruby Tuesday, indicating that it is currently the more affordable of the two stocks.

Summary

Good Times Restaurants beats Ruby Tuesday on 10 of the 12 factors compared between the two stocks.

Good Times Restaurants Company Profile

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.

Ruby Tuesday Company Profile

Ruby Tuesday, Inc. owns and operates Ruby Tuesday casual dining and Lime Fresh Mexican Grill (Lime Fresh) casual restaurants. The Company also franchises the Ruby Tuesday concept in selected domestic and international markets, and the Lime Fresh concept in selected domestic markets. Its segments include Ruby Tuesday concept and Lime Fresh concept. As of March 1, 2016, the Company operated 729 Ruby Tuesday restaurants in 44 states, 13 foreign countries, and Guam, and there were 16 Lime Fresh restaurants in two states. Of those restaurants, it owned and operated approximately 649 Ruby Tuesday restaurants and franchised over 80 Ruby Tuesday restaurants, which consisted of 28 domestic and 52 international restaurants. It also owned and operated over eight Lime Fresh restaurants and franchised eight Lime Fresh domestic restaurants. The Company’s corporate-owned and operated restaurants are concentrated primarily in the Southeast, Northeast, Mid-Atlantic and Midwest of the United States.

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