Compass Group (OTCMKTS:CMPGY) and Meritage Hospitality Group (OTCMKTS:MHGU) Critical Analysis

Compass Group (OTCMKTS:CMPGY) and Meritage Hospitality Group (OTCMKTS:MHGU) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.

Risk & Volatility

Compass Group has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500. Comparatively, Meritage Hospitality Group has a beta of 0.03, meaning that its share price is 97% less volatile than the S&P 500.

Earnings & Valuation

This table compares Compass Group and Meritage Hospitality Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Compass Group	$46.07 billion	1.10	$1.87 billion	N/A	N/A
Meritage Hospitality Group	$668.80 million	0.02	$7.80 million	($1.65)	-1.36

Compass Group has higher revenue and earnings than Meritage Hospitality Group.

Dividends

Compass Group pays an annual dividend of $0.83 per share and has a dividend yield of 2.8%. Meritage Hospitality Group pays an annual dividend of $0.20 per share and has a dividend yield of 8.9%. Meritage Hospitality Group pays out -12.1% of its earnings in the form of a dividend.

Institutional & Insider Ownership

0.0% of Compass Group shares are owned by institutional investors. 0.0% of Compass Group shares are owned by company insiders. Comparatively, 67.8% of Meritage Hospitality Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Compass Group and Meritage Hospitality Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Compass Group	N/A	N/A	N/A
Meritage Hospitality Group	-1.28%	-6.70%	-1.03%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Compass Group and Meritage Hospitality Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Group	0	0	2	2	3.50
Meritage Hospitality Group	0	0	0	0	0.00

Summary

Compass Group beats Meritage Hospitality Group on 11 of the 14 factors compared between the two stocks.

About Compass Group

Compass Group PLC operates as a food and support services company in North America, Europe, and internationally. The company offers support services, such as cleaning in hospitals; reception services at corporate headquarters; managing remote camps; grounds and facilities services at schools and universities; and others. It serves business and industry; healthcare and senior living market; education; sports and leisure; and defense, offshore, and remote sectors. Compass Group PLC was founded in 1941 and is based in Chertsey, the United Kingdom.

About Meritage Hospitality Group

Meritage Hospitality Group Inc. operates quick-service and casual dining restaurants. The company operates restaurants under the Wendy's, Morning Belle, and Stan's Tacos, as well as Taco John's brand names in Arkansas, Connecticut, Florida, Georgia, Indiana, Massachusetts, Michigan, Missouri, Mississippi, North Carolina, South Carolina, Ohio, Oklahoma, Tennessee, Texas, and Virginia. It is also involved in franchising activities. The company was formerly known as Thomas Edison Inns, Inc. and changed its name to Meritage Hospitality Group Inc. in May 1996. Meritage Hospitality Group Inc. was incorporated in 1986 and is based in Grand Rapids, Michigan.