Analyzing J d Wetherspoon (OTCMKTS:JDWPY) and RCI Hospitality (NASDAQ:RICK)

RCI Hospitality (NASDAQ:RICK) and J d Wetherspoon (OTCMKTS:JDWPY) are both small-cap consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.

Insider & Institutional Ownership

53.8% of RCI Hospitality shares are held by institutional investors. 11.4% of RCI Hospitality 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.

Analyst Ratings

This is a breakdown of recent ratings and price targets for RCI Hospitality and J d Wetherspoon, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RCI Hospitality	1	0	0	0	1.00
J d Wetherspoon	1	0	0	0	1.00

Earnings & Valuation

This table compares RCI Hospitality and J d Wetherspoon”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RCI Hospitality	$279.43 million	0.77	$10.81 million	($0.78)	-35.99
J d Wetherspoon	$2.76 billion	0.42	$88.36 million	N/A	N/A

J d Wetherspoon has higher revenue and earnings than RCI Hospitality.

Profitability

This table compares RCI Hospitality and J d Wetherspoon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RCI Hospitality	-1.48%	-1.73%	-0.72%
J d Wetherspoon	N/A	N/A	N/A

Dividends

RCI Hospitality pays an annual dividend of $0.32 per share and has a dividend yield of 1.1%. J d Wetherspoon pays an annual dividend of $0.50 per share and has a dividend yield of 0.9%. RCI Hospitality pays out -41.0% of its earnings in the form of a dividend. RCI Hospitality has increased its dividend for 4 consecutive years. RCI Hospitality is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

RCI Hospitality has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, J d Wetherspoon has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.

About RCI Hospitality

RCI Hospitality Holdings, Inc., through its subsidiaries, engages in the hospitality and related businesses in the United States. It operates in Nightclubs, Bombshells, and Media Group segments. The company’s wholly-owned subsidiaries own and/or operates upscale adult nightclubs serving primarily businessmen and professionals under the Rick's Cabaret, Jaguars Club, Tootsie's Cabaret, XTC Cabaret, Club Onyx, Hoops Cabaret and Sports Bar, Scarlett's Cabaret, Temptations Adult Cabaret, Foxy's Cabaret, Vivid Cabaret, Downtown Cabaret, Cabaret East, The Seville, Silver City Cabaret, and Kappa Men's Club. Wholly-owned subsidiaries also operate restaurants and sports bars under the Bombshells Restaurant & Bar brand; and dance clubs under the Studio 80 brand. As of February 11, 2019, the company operated 46 units, including 39 nightclub units and 7 Bombshell units. In addition, it owns two national industry trade publications serving the adult nightclubs industry and the adult retail products industry; a national industry convention and tradeshow; and two national industry award shows, as well as approximately a dozen industry and social media Websites. The company founded in 1983 as Rick's Cabaret International, Inc., changed its name to RCI Hospitality Holdings, Inc. in August 2014, and is based in Houston, Texas.

About J d Wetherspoon

J D Wetherspoon plc owns and operates pubs and hotels in the United Kingdom and the Republic of Ireland. The company was founded in 1979 and is based in Watford, the United Kingdom.