Critical Comparison: Fiesta Restaurant Group (FRGI) and El Pollo LoCo (LOCO)
Fiesta Restaurant Group (NASDAQ: FRGI) and El Pollo LoCo (NASDAQ:LOCO) are both small-cap cyclical consumer goods & services companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, valuation, risk, earnings and institutional ownership.
Volatility & Risk
Fiesta Restaurant Group has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, El Pollo LoCo has a beta of 0.31, meaning that its share price is 69% less volatile than the S&P 500.
This table compares Fiesta Restaurant Group and El Pollo LoCo’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Fiesta Restaurant Group||$711.77 million||0.73||$16.71 million||($0.86)||-22.44|
|El Pollo LoCo||$380.12 million||1.03||$18.33 million||$0.23||44.13|
El Pollo LoCo has lower revenue, but higher earnings than Fiesta Restaurant Group. Fiesta Restaurant Group is trading at a lower price-to-earnings ratio than El Pollo LoCo, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
94.1% of Fiesta Restaurant Group shares are held by institutional investors. Comparatively, 78.1% of El Pollo LoCo shares are held by institutional investors. 2.2% of Fiesta Restaurant Group shares are held by insiders. Comparatively, 45.9% of El Pollo LoCo shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This table compares Fiesta Restaurant Group and El Pollo LoCo’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Fiesta Restaurant Group||-3.40%||9.49%||5.57%|
|El Pollo LoCo||2.27%||9.14%||5.37%|
This is a summary of recent ratings and recommmendations for Fiesta Restaurant Group and El Pollo LoCo, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Fiesta Restaurant Group||1||4||1||0||2.00|
|El Pollo LoCo||0||3||1||0||2.25|
Fiesta Restaurant Group currently has a consensus target price of $22.60, suggesting a potential upside of 17.10%. El Pollo LoCo has a consensus target price of $13.00, suggesting a potential upside of 28.08%. Given El Pollo LoCo’s stronger consensus rating and higher possible upside, analysts plainly believe El Pollo LoCo is more favorable than Fiesta Restaurant Group.
El Pollo LoCo beats Fiesta Restaurant Group on 8 of the 13 factors compared between the two stocks.
About Fiesta Restaurant Group
Fiesta Restaurant Group, Inc. owns, operates and franchises two fast-casual restaurant brands, Pollo Tropical and Taco Cabana through its subsidiaries Pollo Operations, Inc., and its subsidiaries, and Pollo Franchise, Inc., (collectively Pollo Tropical) and Taco Cabana, Inc. and its subsidiaries (collectively Taco Cabana). The Company operates through the Pollo Tropical and Taco Cabana segments. The Company’s Pollo Tropical restaurants offer Caribbean menu items, featuring its bone-in chicken marinated in blend of tropical fruit juices and grilled over an open flame. The Company also offers catering for parties and corporate events. The Company’s Taco Cabana restaurants serves Mexican food, including flame-grilled steak and chicken fajitas served on sizzling iron skillets, quesadillas, hand-rolled flautas, enchiladas, burritos, tacos, fresh-made flour tortillas, customizable salads served in its Cabana Bowl, and its breakfast tacos.
About El Pollo LoCo
El Pollo Loco Holdings, Inc. specializes in fire-grilling citrus-marinated chicken and operates in the limited service restaurant (LSR) segment. The Company’s menu features its signature product, citrus-marinated fire-grilled chicken, and a range of Mexican-inspired entrees that it creates from chicken. Every day in every restaurant, the Company marinates and fire-grills its chicken over open flames, and hand-slices whole tomatoes, avocados, serrano peppers and cilantro to make its salsas, guacamole and cilantro dressings from scratch. The Company also offers burritos, salads, tostadas, bowls, stuffed quesadillas and chicken entrees. The Company’s entrees include Chicken Avocado Burrito, Under 500 Calorie entrees, Ultimate Pollo Bowl, and Stuffed Chicken Avocado Quesadilla. As of December 28, 2016, the Company had 460 restaurants, consisting of 201 Company-operated and 259 franchised restaurants. The Company also offers additional proteins, such as shrimp, carnitas and beef.
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