McEwen (NYSE:MUX) versus FAT Brands (NASDAQ:FATBB) Critical Analysis

FAT Brands (NASDAQ:FATBB) and McEwen (NYSE:MUX) are both small-cap materials companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, risk, profitability, institutional ownership and earnings.

Earnings and Valuation

This table compares FAT Brands and McEwen”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FAT Brands	$574.14 million	0.03	-$189.85 million	($13.35)	-0.07
McEwen	$197.55 million	4.67	$34.43 million	$1.26	11.93

McEwen has lower revenue, but higher earnings than FAT Brands. FAT Brands is trading at a lower price-to-earnings ratio than McEwen, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares FAT Brands and McEwen’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FAT Brands	-39.33%	N/A	-17.57%
McEwen	32.46%	13.48%	9.13%

Analyst Ratings

This is a summary of current ratings for FAT Brands and McEwen, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FAT Brands	1	0	0	0	1.00
McEwen	0	2	2	0	2.50

McEwen has a consensus price target of $29.50, suggesting a potential upside of 96.21%. Given McEwen’s stronger consensus rating and higher possible upside, analysts clearly believe McEwen is more favorable than FAT Brands.

Insider and Institutional Ownership

17.0% of McEwen shares are owned by institutional investors. 59.9% of FAT Brands shares are owned by company insiders. Comparatively, 14.8% of McEwen shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

FAT Brands has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500. Comparatively, McEwen has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Summary

McEwen beats FAT Brands on 12 of the 14 factors compared between the two stocks.

About FAT Brands

FAT Brands Inc., a multi-brand restaurant franchising company, acquires, develops, markets, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts worldwide. It owns restaurant brands, including Round Table Pizza, Marble Slab Creamery, Great American Cookies, Hot Dog on a Stick, Pretzelmaker, Fazoli's, Fatburger, Johnny Rockets, Elevation Burger, Yalla Mediterranean, Buffalo's Cafe and Buffalo's Express, Hurricane Grill & Wings, Ponderosa Steakhouse/Bonanza Steakhouse, Native Grill & Wings, Smokey Bones, and Twin Peaks. The company was incorporated in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. is a subsidiary of Fog Cutter Holdings, LLC.

About McEwen

McEwen Mining Inc. engages in the exploration, development, production, and sale of gold and silver. It also explores for copper deposits. The company owns 100% interests in the El Gallo and Fenix projects located in Mexico; and the Black Fox Mine and Stock Mill, Grey Fox, and Froome and Tamarack properties in Canada. It also owns interests in the Fuller, Davidson-Tisdale, Buffalo Ankerite, and Paymaster exploration properties located in Canada; and a 49% interest in the San José mine located in Argentina. In addition, the company owns 100% interests in the Gold Bar and Tonkin properties located in Eureka County, Nevada; and interests in the Los Azules copper project located in the cordilleran region in the province of San Juan, Argentina. The company was formerly known as US Gold Corporation and changed its name to McEwen Mining Inc. in January 2012. McEwen Mining Inc. was founded in 1979 and is headquartered in Toronto, Canada.