Kona Grill (NASDAQ: KONA) and Ruby Tuesday (NYSE:RT) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Kona Grill and Ruby Tuesday, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kona Grill 0 2 3 0 2.60
Ruby Tuesday 0 0 0 0 N/A

Kona Grill currently has a consensus target price of $6.67, indicating a potential upside of 77.78%. Given Kona Grill’s higher probable upside, research analysts plainly believe Kona Grill is more favorable than Ruby Tuesday.

Earnings & Valuation

This table compares Kona Grill and Ruby Tuesday’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kona Grill $179.15 million 0.21 $3.91 million ($2.58) -1.45
Ruby Tuesday $951.97 million 0.14 $29.49 million ($1.76) -1.26

Ruby Tuesday has higher revenue and earnings than Kona Grill. Kona Grill is trading at a lower price-to-earnings ratio than Ruby Tuesday, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Kona Grill and Ruby Tuesday’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kona Grill -14.98% -39.42% -11.31%
Ruby Tuesday -11.15% -5.30% -2.30%

Risk and Volatility

Kona Grill has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500. Comparatively, Ruby Tuesday has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500.

Institutional and Insider Ownership

50.1% of Kona Grill shares are owned by institutional investors. Comparatively, 76.1% of Ruby Tuesday shares are owned by institutional investors. 29.2% of Kona Grill shares are owned by insiders. Comparatively, 4.8% of Ruby Tuesday shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Ruby Tuesday beats Kona Grill on 8 of the 12 factors compared between the two stocks.

About Kona Grill

Kona Grill, Inc. owns and operates upscale casual dining restaurants under the name Kona Grill. The Company owns and operates approximately 40 restaurants in 20 states throughout the United States and Puerto Rico. Its high-volume upscale casual restaurants feature a global menu of contemporary American favorites and sushi. Its menu items are prepared from scratch at each restaurant location and incorporate over 40 signature sauces and dressings. It also offers a full service bar offering a range assortment of wines, specialty cocktails and beers. Its restaurants seat an average of approximately 290 customers and comprise multiple dining areas. Its dining area, full-service bar, indoor/outdoor patio and sushi bar provide a choice of atmospheres and a range of environments. It locates its restaurants in various areas, such as retail centers, shopping malls, urban entertainment districts and lifestyle centers that are situated near commercial office space and residential housing.

About Ruby Tuesday

Ruby Tuesday, Inc. owns and operates Ruby Tuesday casual dining and Lime Fresh Mexican Grill (Lime Fresh) casual restaurants. The Company also franchises the Ruby Tuesday concept in selected domestic and international markets, and the Lime Fresh concept in selected domestic markets. Its segments include Ruby Tuesday concept and Lime Fresh concept. As of March 1, 2016, the Company operated 729 Ruby Tuesday restaurants in 44 states, 13 foreign countries, and Guam, and there were 16 Lime Fresh restaurants in two states. Of those restaurants, it owned and operated approximately 649 Ruby Tuesday restaurants and franchised over 80 Ruby Tuesday restaurants, which consisted of 28 domestic and 52 international restaurants. It also owned and operated over eight Lime Fresh restaurants and franchised eight Lime Fresh domestic restaurants. The Company’s corporate-owned and operated restaurants are concentrated primarily in the Southeast, Northeast, Mid-Atlantic and Midwest of the United States.

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