Del Frisco’s Restaurant Group (NASDAQ: DFRG) and DineEquity (NYSE:DIN) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitabiliy.
Risk and Volatility
Del Frisco’s Restaurant Group has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500. Comparatively, DineEquity has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500.
Earnings and Valuation
This table compares Del Frisco’s Restaurant Group and DineEquity’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Del Frisco’s Restaurant Group | $356.76 million | 0.83 | $41.74 million | $0.56 | 25.00 |
| DineEquity | $626.62 million | 1.11 | $241.22 million | $4.75 | 8.17 |
DineEquity has higher revenue and earnings than Del Frisco’s Restaurant Group. DineEquity is trading at a lower price-to-earnings ratio than Del Frisco’s Restaurant Group, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Del Frisco’s Restaurant Group and DineEquity, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Del Frisco’s Restaurant Group | 0 | 3 | 2 | 0 | 2.40 |
| DineEquity | 0 | 4 | 3 | 0 | 2.43 |
Del Frisco’s Restaurant Group currently has a consensus price target of $18.75, indicating a potential upside of 33.93%. DineEquity has a consensus price target of $57.00, indicating a potential upside of 46.87%. Given DineEquity’s stronger consensus rating and higher probable upside, analysts plainly believe DineEquity is more favorable than Del Frisco’s Restaurant Group.
Dividends
DineEquity pays an annual dividend of $3.88 per share and has a dividend yield of 10.0%. Del Frisco’s Restaurant Group does not pay a dividend. DineEquity pays out 81.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DineEquity has raised its dividend for 2 consecutive years.
Insider and Institutional Ownership
88.9% of DineEquity shares are held by institutional investors. 2.4% of Del Frisco’s Restaurant Group shares are held by company insiders. Comparatively, 2.2% of DineEquity 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.
Profitability
This table compares Del Frisco’s Restaurant Group and DineEquity’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% |
| DineEquity | 13.85% | 40.48% | 4.59% |
Summary
DineEquity beats Del Frisco’s Restaurant Group on 12 of the 17 factors compared between the two stocks.
About Del Frisco’s Restaurant Group
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.
About DineEquity
DineEquity, Inc., through its subsidiaries, owns and franchises the Applebee’s Neighborhood Grill & Bar (Applebee’s) concept in the bar and grill segment within the casual dining category of the restaurant industry, and owns, franchises and operates the International House of Pancakes (IHOP) concept in the family dining category of the restaurant industry. It operates through four segments: Franchise operations, Rental operations, Company restaurant operations and Financing operations. As of December 31, 2016, it had 3,749 restaurants. Applebee’s menu features a selection of grill and bar fare, such as appetizers, bar snacks, burgers, classic entrees and lighter fare, as well as cocktails, beers and desserts. As of December 31, 2016, IHOP franchise and area license restaurants were located in all 50 states within the United States, in the District of Columbia, in three United States territories and in 10 countries outside of the United States.
Receive News & Ratings for Del Frisco's Restaurant Group Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Del Frisco's Restaurant Group Inc. and related companies with MarketBeat.com's FREE daily email newsletter.
