Habit Restaurants (NASDAQ:HABT) and Fiesta Restaurant Group (NASDAQ:FRGI) are both small-cap retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.

Risk and Volatility

Habit Restaurants has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500. Comparatively, Fiesta Restaurant Group has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Habit Restaurants and Fiesta Restaurant Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Habit Restaurants 0 1 3 0 2.75
Fiesta Restaurant Group 0 1 2 0 2.67

Habit Restaurants presently has a consensus target price of $17.20, indicating a potential upside of 59.11%. Fiesta Restaurant Group has a consensus target price of $26.50, indicating a potential upside of 113.54%. Given Fiesta Restaurant Group’s higher possible upside, analysts clearly believe Fiesta Restaurant Group is more favorable than Habit Restaurants.

Valuation and Earnings

This table compares Habit Restaurants and Fiesta Restaurant Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Habit Restaurants $402.15 million 0.70 $2.78 million $0.17 63.59
Fiesta Restaurant Group $688.60 million 0.49 $7.79 million $0.60 20.68

Fiesta Restaurant Group has higher revenue and earnings than Habit Restaurants. Fiesta Restaurant Group is trading at a lower price-to-earnings ratio than Habit Restaurants, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Habit Restaurants and Fiesta Restaurant Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Habit Restaurants 0.69% 3.01% 1.44%
Fiesta Restaurant Group 1.13% 6.77% 3.91%

Insider & Institutional Ownership

65.5% of Habit Restaurants shares are owned by institutional investors. Comparatively, 97.0% of Fiesta Restaurant Group shares are owned by institutional investors. 16.0% of Habit Restaurants shares are owned by insiders. Comparatively, 1.4% of Fiesta Restaurant Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Fiesta Restaurant Group beats Habit Restaurants on 8 of the 14 factors compared between the two stocks.

Habit Restaurants Company Profile

The Habit Restaurants, Inc., a holding company, operates and franchises fast casual restaurants under The Habit Burger Grill name. It specializes in offering made-to-order char-grilled burgers and sandwiches featuring choice tri-tip steak, grilled chicken, and sushi-grade tuna cooked over an open flame; and salads, as well as sides, shakes, and malts. As of February 28, 2019, the company had 250 restaurants in California, Arizona, Utah, New Jersey, Florida, Idaho, Virginia, Nevada, Washington, Maryland, and Pennsylvania, as well as 4 international locations. The Habit Restaurants, Inc. was founded in 1969 and is headquartered in Irvine, California.

Fiesta Restaurant Group Company Profile

Fiesta Restaurant Group, Inc., through its subsidiaries, owns, operates, and franchises fast-casual restaurants. It operates its fast-casual restaurants under the Pollo Tropical and Taco Cabana brands. The company's Pollo Tropical restaurants offer fire-grilled and citrus marinated chicken, and other freshly prepared tropical inspired menu items; and Taco Cabana restaurants that provide Mexican inspired food made fresh by hand. As of December 30, 2018, it operated 139 Pollo Tropical restaurants in Florida; 162 company owned Taco Cabana restaurants; and franchised 30 Pollo Tropical restaurants in Puerto Rico, Panama, Guyana, Bahamas, and Florida, as well as franchised Taco Cabana restaurants 6 in New Mexico and 2 in Texas. The company was incorporated in 2011 and is headquartered in Dallas, Texas.

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