Ruth’s Hospitality Group (NASDAQ: RUTH) and Famous Dave’s of America (NASDAQ:DAVE) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, earnings, risk, valuation and dividends.

Risk & Volatility

Ruth’s Hospitality Group has a beta of 0.29, indicating that its stock price is 71% less volatile than the S&P 500. Comparatively, Famous Dave’s of America has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500.

Institutional and Insider Ownership

85.6% of Ruth’s Hospitality Group shares are held by institutional investors. Comparatively, 60.5% of Famous Dave’s of America shares are held by institutional investors. 6.7% of Ruth’s Hospitality Group shares are held by company insiders. Comparatively, 27.0% of Famous Dave’s of America shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Ruth’s Hospitality Group and Famous Dave’s of America’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ruth’s Hospitality Group $396.96 million 1.54 $62.65 million $1.01 19.85
Famous Dave’s of America $97.67 million 0.31 $2.90 million ($0.85) -5.12

Ruth’s Hospitality Group has higher revenue and earnings than Famous Dave’s of America. Famous Dave’s of America is trading at a lower price-to-earnings ratio than Ruth’s Hospitality Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Ruth’s Hospitality Group pays an annual dividend of $0.36 per share and has a dividend yield of 1.8%. Famous Dave’s of America does not pay a dividend. Ruth’s Hospitality Group pays out 35.6% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current recommendations and price targets for Ruth’s Hospitality Group and Famous Dave’s of America, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ruth’s Hospitality Group 0 3 1 0 2.25
Famous Dave’s of America 0 0 0 0 N/A

Ruth’s Hospitality Group presently has a consensus target price of $20.75, suggesting a potential upside of 3.49%. Given Ruth’s Hospitality Group’s higher probable upside, analysts plainly believe Ruth’s Hospitality Group is more favorable than Famous Dave’s of America.

Profitability

This table compares Ruth’s Hospitality Group and Famous Dave’s of America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ruth’s Hospitality Group 7.97% 37.86% 15.69%
Famous Dave’s of America -6.19% 0.68% 0.26%

Summary

Ruth’s Hospitality Group beats Famous Dave’s of America on 11 of the 14 factors compared between the two stocks.

About Ruth’s Hospitality Group

Ruth’s Hospitality Group, Inc. develops and operates fine dining restaurants under the name, Ruth’s Chris Steak House. The Company operates through two segments. As of December 25, 2016, the Company-owned steakhouse restaurant segment included 68 Ruth’s Chris Steak House restaurants and one Ruth’s Chris Steak House restaurant, and the franchise operations segment included 81 franchisee-owned Ruth’s Chris Steak House restaurants. Its restaurant’s menu features a selection of Prime and Choice grade steaks, and other offerings. Its menu also includes lamb chops, fish, shrimp, crab, chicken and lobster. Its Ruth’s Chris restaurants offer 10 to 13 appetizer items, including Orleans-style barbequed shrimp, mushrooms stuffed with crabmeat, lobster bisque and osso bucco ravioli. It also offers a range of potatoes and vegetables as side dishes. For dessert, creme brulee, white chocolate bread pudding, cheesecake, fresh seasonal berries with sweet cream sauce and other selections are available.

About Famous Dave’s of America

Famous Dave’s of America, Inc. (Famous Dave’s) operates restaurants. The Company’s restaurants, which offer full table service, feature wood-smoked and off-the-grill entree favorites that fit into the barbeque category. It has the Company-owned and franchise-operated restaurants in the United States, the Commonwealth of Puerto Rico, and Canada, and it operates within the industry segment of foodservice. It operates approximately 179 Famous Dave’s restaurants in over 33 states, the Commonwealth of Puerto Rico and Canada, including over 44 the Company-owned restaurants and approximately 135 franchise-operated restaurants. Each restaurant features a selection of hickory-smoked and off-the-grill barbecue favorites, such as flame-grilled St. Louis-style and baby back ribs, Texas beef brisket, Georgia chopped pork, country-roasted chicken, and signature sandwiches and salads. Its restaurants offer side items, such as corn bread, potato salad, coleslaw, Shack Fries and Wilbur Beans.

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