Potbelly (OTCMKTS: NROM) and Noble Roman’s (OTCMKTS:NROM) are both small-cap retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for Potbelly and Noble Roman’s, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Potbelly 0 2 1 0 2.33
Noble Roman’s 0 0 0 0 N/A

Potbelly presently has a consensus price target of $14.33, indicating a potential upside of 5.01%. Given Potbelly’s higher probable upside, analysts clearly believe Potbelly is more favorable than Noble Roman’s.

Insider & Institutional Ownership

70.3% of Potbelly shares are owned by institutional investors. Comparatively, 0.3% of Noble Roman’s shares are owned by institutional investors. 10.2% of Potbelly shares are owned by insiders. Comparatively, 30.1% of Noble Roman’s shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Potbelly and Noble Roman’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Potbelly -2.33% 6.70% 4.59%
Noble Roman’s -29.98% -24.50% -15.45%

Valuation & Earnings

This table compares Potbelly and Noble Roman’s’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Potbelly $428.11 million 0.81 -$6.95 million $0.31 44.03
Noble Roman’s $9.83 million 1.41 -$3.38 million N/A N/A

Noble Roman’s has lower revenue, but higher earnings than Potbelly.

Risk & Volatility

Potbelly has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500. Comparatively, Noble Roman’s has a beta of 0.62, indicating that its share price is 38% less volatile than the S&P 500.

Summary

Potbelly beats Noble Roman’s on 8 of the 11 factors compared between the two stocks.

Potbelly Company Profile

Potbelly Corporation, through its subsidiaries, owns, operates, and franchises Potbelly Sandwich Works sandwich shops in the United States. It offers toasty warm sandwiches, salads, and other items. As of February 23, 2018, the company operated approximately 400 shops in the United States; and approximately 50 franchisees operated shops in the United States, the Middle East, the United Kingdom, Canada, and India. The company was formerly known as Potbelly Sandwich Works, Inc. and changed its name to Potbelly Corporation in 2002. Potbelly Corporation was founded in 1977 and is headquartered in Chicago, Illinois.

Noble Roman’s Company Profile

Noble Roman's, Inc. sells and services franchises and licenses for non-traditional foodservice operations and stand-alone take-n-bake locations. It franchises and licenses under the Noble Roman's Pizza, Noble Roman's Take-N-Bake, Noble Roman's Craft Pizza & Pub, and Tuscano's Italian Style Subs trade names, which provide pizza and sub sandwiches, and other related menu items. As of December 31, 2016, the company operated 2,768 franchised or licensed outlets. It has operations in 50 states, Washington, D.C., Puerto Rico, the Bahamas, Italy, the Dominican Republic, and Canada. Noble Roman's, Inc. was incorporated in 1972 and is headquartered in Indianapolis, Indiana.

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