Financial Comparison: Arc Group (OTCMKTS:RLLY) and Wendy’s (NASDAQ:WEN)

Wendy’s (NASDAQ:WEN) and Arc Group (OTCMKTS:RLLY) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, valuation, institutional ownership and dividends.

Analyst Ratings

This is a summary of current ratings for Wendy’s and Arc Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wendy’s	5	16	4	1	2.04
Arc Group	0	0	0	0	0.00

Wendy’s presently has a consensus price target of $9.39, indicating a potential upside of 16.09%. Given Wendy’s’ stronger consensus rating and higher possible upside, analysts clearly believe Wendy’s is more favorable than Arc Group.

Valuation & Earnings

This table compares Wendy’s and Arc Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wendy’s	$2.18 billion	0.71	$165.07 million	$0.85	9.52
Arc Group	N/A	N/A	N/A	N/A	N/A

Wendy’s has higher revenue and earnings than Arc Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Wendy’s	7.58%	145.93%	3.47%
Arc Group	N/A	N/A	N/A

Institutional and Insider Ownership

86.0% of Wendy’s shares are owned by institutional investors. 17.0% of Wendy’s shares are owned by company insiders. Comparatively, 12.4% of Arc Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Wendy’s beats Arc Group on 10 of the 10 factors compared between the two stocks.

About Wendy’s

The Wendy’s Co. engages in operating, developing, and franchising a system of quick-service restaurants. It operates through the following segments: Wendy’s U.S., Wendy’s International, and Global Real Estate and Development. The Wendy’s U.S. segment includes the operation and franchising of Wendy’s restaurants in the U.S. The Wendy’s International segment is involved in the operation and franchising of Wendy’s restaurants in countries and territories other than the U.S. The Global Real Estate and Development segment focuses on real estate activity for owned sites and sites leased from third parties. The company was founded by R. David Thomas on November 15, 1969 and is headquartered in Dublin, OH.

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.