DineEquity (NYSE: DIN) and Fiesta Restaurant Group (NASDAQ:FRGI) 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 analyst recommendations, institutional ownership, risk, profitability, valuation, dividends and earnings.
Risk and Volatility
DineEquity has a beta of 0.39, indicating that its stock price is 61% less volatile than the S&P 500. Comparatively, Fiesta Restaurant Group has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500.
Valuation & Earnings
This table compares DineEquity and Fiesta Restaurant Group’s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| DineEquity | $626.62 million | 1.14 | $241.22 million | $4.48 | 8.87 |
| Fiesta Restaurant Group | $701.79 million | 0.71 | $69.79 million | ($0.72) | -25.97 |
DineEquity has higher revenue, but lower earnings than Fiesta Restaurant Group. Fiesta Restaurant Group is trading at a lower price-to-earnings ratio than DineEquity, indicating that it is currently the more affordable of the two stocks.
Dividends
DineEquity pays an annual dividend of $3.88 per share and has a dividend yield of 9.8%. Fiesta Restaurant Group does not pay a dividend. DineEquity pays out 86.6% 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 increased its dividend for 2 consecutive years.
Profitability
This table compares DineEquity and Fiesta Restaurant Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| DineEquity | 13.02% | 38.34% | 4.35% |
| Fiesta Restaurant Group | -2.75% | 11.77% | 6.95% |
Institutional & Insider Ownership
88.9% of DineEquity shares are held by institutional investors. Comparatively, 93.6% of Fiesta Restaurant Group shares are held by institutional investors. 2.2% of DineEquity shares are held by company insiders. Comparatively, 2.2% of Fiesta Restaurant Group shares are held by company 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.
Analyst Recommendations
This is a summary of current ratings and recommmendations for DineEquity and Fiesta Restaurant Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| DineEquity | 0 | 4 | 3 | 0 | 2.43 |
| Fiesta Restaurant Group | 0 | 6 | 1 | 0 | 2.14 |
DineEquity presently has a consensus target price of $57.00, suggesting a potential upside of 43.50%. Fiesta Restaurant Group has a consensus target price of $24.00, suggesting a potential upside of 28.34%. Given DineEquity’s stronger consensus rating and higher possible upside, equities research analysts plainly believe DineEquity is more favorable than Fiesta Restaurant Group.
Summary
DineEquity beats Fiesta Restaurant Group on 10 of the 17 factors compared between the two stocks.
DineEquity Company Profile
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.
Fiesta Restaurant Group Company Profile
Fiesta Restaurant Group, Inc. owns, operates and franchises two fast-casual restaurant brands, Pollo Tropical and Taco Cabana through its subsidiaries Pollo Operations, Inc., and its subsidiaries, and Pollo Franchise, Inc., (collectively Pollo Tropical) and Taco Cabana, Inc. and its subsidiaries (collectively Taco Cabana). The Company operates through the Pollo Tropical and Taco Cabana segments. The Company’s Pollo Tropical restaurants offer Caribbean menu items, featuring its bone-in chicken marinated in blend of tropical fruit juices and grilled over an open flame. The Company also offers catering for parties and corporate events. The Company’s Taco Cabana restaurants serves Mexican food, including flame-grilled steak and chicken fajitas served on sizzling iron skillets, quesadillas, hand-rolled flautas, enchiladas, burritos, tacos, fresh-made flour tortillas, customizable salads served in its Cabana Bowl, and its breakfast tacos.
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