Famous Dave’s of America (NASDAQ: DAVE) and The Cheesecake Factory (NASDAQ:CAKE) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.

Profitability

This table compares Famous Dave’s of America and The Cheesecake Factory’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Famous Dave’s of America -6.19% 0.70% 0.26%
The Cheesecake Factory 6.10% 22.92% 11.11%

Risk and Volatility

Famous Dave’s of America has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500. Comparatively, The Cheesecake Factory has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500.

Valuation and Earnings

This table compares Famous Dave’s of America and The Cheesecake Factory’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Famous Dave’s of America $95.23 million 0.33 $3.05 million ($0.85) -5.24
The Cheesecake Factory $2.30 billion 0.84 $283.91 million $2.85 14.68

The Cheesecake Factory has higher revenue and earnings than Famous Dave’s of America. Famous Dave’s of America is trading at a lower price-to-earnings ratio than The Cheesecake Factory, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

62.4% of Famous Dave’s of America shares are held by institutional investors. Comparatively, 96.2% of The Cheesecake Factory shares are held by institutional investors. 27.0% of Famous Dave’s of America shares are held by insiders. Comparatively, 8.5% of The Cheesecake Factory shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Famous Dave’s of America and The Cheesecake Factory, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Famous Dave’s of America 0 0 0 0 N/A
The Cheesecake Factory 1 12 5 0 2.22

The Cheesecake Factory has a consensus target price of $53.18, suggesting a potential upside of 27.13%. Given The Cheesecake Factory’s higher probable upside, analysts plainly believe The Cheesecake Factory is more favorable than Famous Dave’s of America.

Dividends

The Cheesecake Factory pays an annual dividend of $1.16 per share and has a dividend yield of 2.8%. Famous Dave’s of America does not pay a dividend. The Cheesecake Factory pays out 40.7% of its earnings in the form of a dividend.

Summary

The Cheesecake Factory beats Famous Dave’s of America on 11 of the 14 factors compared between the two stocks.

Famous Dave’s of America Company Profile

Famous Dave’s of America, Inc. (Famous Dave’s) operates restaurants. The Company’s restaurants, which offer full table service, feature wood-smoked and off-the-grill entree favorites that fit into the barbeque category. It has the Company-owned and franchise-operated restaurants in the United States, the Commonwealth of Puerto Rico, and Canada, and it operates within the industry segment of foodservice. It operates approximately 179 Famous Dave’s restaurants in over 33 states, the Commonwealth of Puerto Rico and Canada, including over 44 the Company-owned restaurants and approximately 135 franchise-operated restaurants. Each restaurant features a selection of hickory-smoked and off-the-grill barbecue favorites, such as flame-grilled St. Louis-style and baby back ribs, Texas beef brisket, Georgia chopped pork, country-roasted chicken, and signature sandwiches and salads. Its restaurants offer side items, such as corn bread, potato salad, coleslaw, Shack Fries and Wilbur Beans.

The Cheesecake Factory Company Profile

The Cheesecake Factory Incorporated is engaged in the restaurant and bakery business. As of March 2, 2017, the Company operated 208 Company-owned restaurants: 194 under The Cheesecake Factory mark, 13 under the Grand Lux Cafe mark and one under the Rock Sugar Pan Asian Kitchen mark. The Company’s segments include The Cheesecake Factory restaurants, and other. It also operates bakery production facilities, which produce desserts for its restaurants, international licensees and third-party bakery customers. Its restaurants offer lunch and dinner, as well as Sunday brunch. Its restaurants also offer a bar. As of January 3, 2017, its menu consisted of over 200 items in addition to items presented on supplemental menus, such as its SkinnyLicious menu, which offers approximately 50 items. Its Grand Lux Cafe is a casual dining concept that offers artisan cuisine. It offers appetizers, seafood and steaks.

Receive News & Ratings for Famous Dave's of America Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Famous Dave's of America Inc. and related companies with Analyst Ratings Network's FREE daily email newsletter.