Head-To-Head Review: Arc Group (OTCMKTS:RLLY) versus Rave Restaurant Group (NASDAQ:RAVE)

Arc Group (OTCMKTS:RLLY) and Rave Restaurant Group (NASDAQ:RAVE) are both retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, risk, profitability, earnings and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations for Arc Group and Rave Restaurant Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arc Group	0	0	0	0	0.00
Rave Restaurant Group	0	1	0	0	2.00

Given Arc Group’s higher possible upside, equities research analysts clearly believe Arc Group is more favorable than Rave Restaurant Group.

Profitability

This table compares Arc Group and Rave Restaurant Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arc Group	N/A	N/A	N/A
Rave Restaurant Group	23.12%	20.11%	17.26%

Valuation and Earnings

This table compares Arc Group and Rave Restaurant Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arc Group	N/A	N/A	N/A	N/A	N/A
Rave Restaurant Group	$12.20 million	3.27	$2.70 million	$0.20	14.05

Rave Restaurant Group has higher revenue and earnings than Arc Group.

Institutional & Insider Ownership

15.1% of Rave Restaurant Group shares are held by institutional investors. 12.4% of Arc Group shares are held by insiders. Comparatively, 28.0% of Rave Restaurant Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Rave Restaurant Group beats Arc Group on 7 of the 8 factors compared between the two stocks.

About Arc Group

ARC Group, Inc. engages in the operation of Dick’s Wings brand of restaurants. It offers its traditional and boneless chicken wings, hog wings, and duck wings spun in its signature sauces and seasonings. The firm oprates through the following segments; Company-Owned Restaurants and Franchise Operations. The Company-Owned Restaurants are casual dining restaurants. The Franchise Operations segment offers franchises for the Dick’s Wings brand. It also offers craft beers under the name Dick’s Craft Beers. The company was founded in April 2000 and is headquartered in Jacksonville, FL.

About Rave Restaurant Group

Rave Restaurant Group, Inc., together with its subsidiaries, engages in the operation and franchising of pizza buffet, delivery/carry-out (delco), and express restaurants under the Pizza Inn and Pie Five trademarks in the United States and internationally. The company operates through three segments: Pizza Inn Franchising, Pie Five Franchising, and Company-Owned Restaurants. Its buffet restaurants are located in free standing buildings or strip centers in retail developments that offer dine-in, carryout, and catering services, as well as delivery services. The company’s delco restaurants provide delivery and carryout services and are located in shopping centers or other in-line retail developments. Its Express restaurants serve customers through various non-traditional points of sale and are located in convenience stores, food courts, college campuses, airport terminals, travel plazas, athletic facilities, or other commercial facilities. The company’s Pizza Inn Express restaurants serve customers through a non-traditional, licensed, pizza-only model called Pizza Inn Express, located at production-oriented facilities. In addition, it operates and franchises fast casual restaurants under the Pie Five Pizza Company or Pie Five trademarks. The company was formerly known as Pizza Inn Holdings, Inc. and changed its name to Rave Restaurant Group, Inc. in January 2015. Rave Restaurant Group, Inc. was founded in 1958 and is based in The Colony, Texas.