Star Buffet (OTCMKTS:STRZ) and Del Taco Restaurants (NASDAQ:TACO) are both retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, dividends, analyst recommendations, risk and valuation.

Analyst Ratings

This is a summary of recent ratings and target prices for Star Buffet and Del Taco Restaurants, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Star Buffet 0 0 0 0 N/A
Del Taco Restaurants 0 2 4 0 2.67

Del Taco Restaurants has a consensus price target of $14.67, indicating a potential upside of 46.37%. Given Del Taco Restaurants’ higher possible upside, analysts clearly believe Del Taco Restaurants is more favorable than Star Buffet.

Insider & Institutional Ownership

82.0% of Del Taco Restaurants shares are owned by institutional investors. 53.6% of Star Buffet shares are owned by insiders. Comparatively, 14.6% of Del Taco Restaurants shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Star Buffet has a beta of 3.36, indicating that its stock price is 236% more volatile than the S&P 500. Comparatively, Del Taco Restaurants has a beta of 0.2, indicating that its stock price is 80% less volatile than the S&P 500.

Valuation & Earnings

This table compares Star Buffet and Del Taco Restaurants’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Star Buffet $26.52 million N/A $120,000.00 N/A N/A
Del Taco Restaurants $505.49 million 0.73 $18.96 million $0.56 17.89

Del Taco Restaurants has higher revenue and earnings than Star Buffet.

Profitability

This table compares Star Buffet and Del Taco Restaurants’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Star Buffet -1.04% N/A -3.89%
Del Taco Restaurants 3.75% 5.12% 2.87%

Summary

Del Taco Restaurants beats Star Buffet on 8 of the 10 factors compared between the two stocks.

Star Buffet Company Profile

Star Buffet, Inc. owns and operates full service restaurants in the United States. As of July 19, 2018, it operated 27 restaurants in 10 states. The company operates its restaurants under the 4B's, JB's, Barnhill's Salads Buffet Desserts, Casa Bonita, and BuddyFreddys names. Star Buffet, Inc. was founded in 1997 and is based in Scottsdale, Arizona.

Del Taco Restaurants Company Profile

Del Taco Restaurants, Inc. develops, franchises, owns, and operates Del Taco quick-service Mexican-American restaurants in the United States. The company's restaurants offer Mexican inspired and American classic dishes. As of December 10, 2018, it operated approximately 560 restaurants across 14 states. The company was founded in 1964 and is headquartered in Lake Forest, California.

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