Domino’s Pizza (NASDAQ:DPZ) and Ark Restaurants (NASDAQ:ARKR) Head to Head Review

Domino’s Pizza (NASDAQ:DPZ) and Ark Restaurants (NASDAQ:ARKR) are both retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Profitability

This table compares Domino’s Pizza and Ark Restaurants’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Domino’s Pizza	11.89%	-15.04%	33.66%
Ark Restaurants	-3.97%	-8.49%	-2.09%

Valuation & Earnings

This table compares Domino’s Pizza and Ark Restaurants”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Domino’s Pizza	$4.94 billion	1.98	$601.70 million	$17.37	16.93
Ark Restaurants	$158.37 million	0.13	-$11.47 million	($1.74)	-3.25

Domino’s Pizza has higher revenue and earnings than Ark Restaurants. Ark Restaurants is trading at a lower price-to-earnings ratio than Domino’s Pizza, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

94.6% of Domino’s Pizza shares are held by institutional investors. Comparatively, 32.0% of Ark Restaurants shares are held by institutional investors. 0.9% of Domino’s Pizza shares are held by insiders. Comparatively, 37.5% of Ark Restaurants shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for Domino’s Pizza and Ark Restaurants, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Domino’s Pizza	1	12	17	0	2.53
Ark Restaurants	1	0	0	0	1.00

Domino’s Pizza currently has a consensus target price of $412.97, suggesting a potential upside of 40.44%. Given Domino’s Pizza’s stronger consensus rating and higher possible upside, equities analysts plainly believe Domino’s Pizza is more favorable than Ark Restaurants.

Risk and Volatility

Domino’s Pizza has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Ark Restaurants has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500.

Dividends

Domino’s Pizza pays an annual dividend of $7.96 per share and has a dividend yield of 2.7%. Ark Restaurants pays an annual dividend of $0.18 per share and has a dividend yield of 3.2%. Domino’s Pizza pays out 45.8% of its earnings in the form of a dividend. Ark Restaurants pays out -10.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Domino’s Pizza has increased its dividend for 12 consecutive years. Ark Restaurants is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Domino’s Pizza beats Ark Restaurants on 13 of the 17 factors compared between the two stocks.

About Domino’s Pizza

Domino’s Pizza, Inc., through its subsidiaries, operates as a pizza company in the United States and internationally. The company operates through three segments: U.S. Stores, International Franchise, and Supply Chain. It offers pizzas under the Domino’s brand name through company-owned and franchised stores. It also provides oven-baked sandwiches, pastas, boneless chicken and chicken wings, breads and dips, desserts, and soft drink products, as well as loaded tots and pepperoni stuffed cheesy breads. Domino’s Pizza, Inc. was founded in 1960 and is headquartered in Ann Arbor, Michigan.

About Ark Restaurants

Ark Restaurants Corp., through its subsidiaries, owns and operates restaurants and bars in the United States. It operates restaurants in New York City; Washington, D.C.; Las Vegas, Nevada; Atlantic City, New Jersey; Florida; and Alabama, as well as fast food concepts and catering operations. The company was incorporated in 1983 and is based in New York, New York.