Del Frisco’s Restaurant Group (NASDAQ: DFRG) and Denny’s Corporation (NASDAQ:DENN) are both small-cap retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, valuation, analyst recommendations, profitabiliy and earnings.
Valuation and Earnings
This table compares Del Frisco’s Restaurant Group and Denny’s Corporation’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Del Frisco’s Restaurant Group | $356.76 million | 0.85 | $41.74 million | $0.56 | 25.54 |
| Denny’s Corporation | $510.22 million | 1.56 | $93.18 million | $0.25 | 45.60 |
Denny’s Corporation has higher revenue and earnings than Del Frisco’s Restaurant Group. Del Frisco’s Restaurant Group is trading at a lower price-to-earnings ratio than Denny’s Corporation, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Del Frisco’s Restaurant Group and Denny’s Corporation, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Del Frisco’s Restaurant Group | 0 | 3 | 2 | 0 | 2.40 |
| Denny’s Corporation | 0 | 2 | 1 | 0 | 2.33 |
Del Frisco’s Restaurant Group currently has a consensus target price of $18.75, suggesting a potential upside of 31.12%. Denny’s Corporation has a consensus target price of $12.67, suggesting a potential upside of 11.11%. Given Del Frisco’s Restaurant Group’s stronger consensus rating and higher possible upside, equities analysts plainly believe Del Frisco’s Restaurant Group is more favorable than Denny’s Corporation.
Insider & Institutional Ownership
97.1% of Del Frisco’s Restaurant Group shares are held by institutional investors. Comparatively, 89.2% of Denny’s Corporation shares are held by institutional investors. 2.4% of Del Frisco’s Restaurant Group shares are held by company insiders. Comparatively, 5.2% of Denny’s Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Volatility and Risk
Del Frisco’s Restaurant Group has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Denny’s Corporation has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500.
Profitability
This table compares Del Frisco’s Restaurant Group and Denny’s Corporation’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Del Frisco’s Restaurant Group | 3.73% | 7.39% | 4.77% |
| Denny’s Corporation | 3.49% | -68.77% | 13.82% |
Summary
Del Frisco’s Restaurant Group beats Denny’s Corporation on 8 of the 14 factors compared between the two stocks.
Del Frisco’s Restaurant Group Company Profile
Del Frisco’s Restaurant Group, Inc. develops, owns and operates three contemporary, complementary restaurants: Del Frisco’s Double Eagle Steak House (Del Frisco’s), Sullivan’s Steakhouse (Sullivan’s) and Del Frisco’s Grille (the Grille). As of December 27, 2016, the Company operated 53 restaurants in 24 states and the District of Columbia in the United States. The Company’s segments include Del Frisco’s, Sullivan’s and the Grille. Del Frisco’s is a steakhouse concept in the United States. The Del Frisco’s brand’s menu includes the United States Department of Agriculture (USDA) Prime grade, wet-aged steaks hand-cut at the time of order and a range of other offerings, including prime lamb, fresh seafood, and signature side dishes and desserts. Each restaurant has a sommelier to guide diners through a wine list. As of December 27, 2016, the Company operated 12 Del Frisco’s steakhouses in nine states and the District of Columbia. Sullivan’s is a complementary concept to Del Frisco’s.
Denny’s Corporation Company Profile
Denny’s Corporation (Denny’s) operates a franchised full-service restaurant chain. The Company, through its subsidiary, Denny’s, Inc., owns and operates the Denny’s brand. As of December 28, 2016, the Denny’s brand consisted of 1,733 franchised, licensed and Company-operated restaurants around the world, including 1,610 restaurants in the United States and 123 international locations. As of December 28, 2016, 1,564 of its restaurants were franchised or licensed and 169 were Company-operated. In addition to its breakfast-all-day items, Denny’s offers a selection of lunch and dinner items, including burgers, sandwiches, salads and skillet entrees, along with an assortment of beverages, appetizers and desserts. The Company’s Fit Fare menu helps its guests identify items suited to their dietary needs. Most Denny’s restaurants offer special items for children and seniors. The Company has restaurant locations within travel centers, primarily with Pilot and Pilot Flying J Travel Centers.
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