RCI Hospitality Holdings (NASDAQ: RICK) and Cosi (NASDAQ:COSI) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.
Valuation & Earnings
This table compares RCI Hospitality Holdings and Cosi’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| RCI Hospitality Holdings | $135.25 million | 1.89 | $33.74 million | $1.13 | 23.30 |
| Cosi | N/A | N/A | N/A | ($0.31) | -0.09 |
RCI Hospitality Holdings has higher revenue and earnings than Cosi. Cosi is trading at a lower price-to-earnings ratio than RCI Hospitality Holdings, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
40.4% of RCI Hospitality Holdings shares are owned by institutional investors. Comparatively, 37.6% of Cosi shares are owned by institutional investors. 7.6% of RCI Hospitality Holdings shares are owned by company insiders. Comparatively, 7.8% of Cosi shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares RCI Hospitality Holdings and Cosi’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| RCI Hospitality Holdings | 7.84% | 10.75% | 5.08% |
| Cosi | -13.67% | -96.97% | -38.82% |
Analyst Ratings
This is a summary of recent ratings for RCI Hospitality Holdings and Cosi, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| RCI Hospitality Holdings | 0 | 0 | 2 | 0 | 3.00 |
| Cosi | 0 | 0 | 0 | 0 | N/A |
RCI Hospitality Holdings currently has a consensus target price of $28.50, suggesting a potential upside of 8.24%. Given RCI Hospitality Holdings’ higher possible upside, analysts plainly believe RCI Hospitality Holdings is more favorable than Cosi.
Risk and Volatility
RCI Hospitality Holdings has a beta of 0.25, suggesting that its stock price is 75% less volatile than the S&P 500. Comparatively, Cosi has a beta of -0.67, suggesting that its stock price is 167% less volatile than the S&P 500.
Dividends
RCI Hospitality Holdings pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. Cosi does not pay a dividend. RCI Hospitality Holdings pays out 10.6% of its earnings in the form of a dividend.
Summary
RCI Hospitality Holdings beats Cosi on 10 of the 12 factors compared between the two stocks.
About RCI Hospitality Holdings
With more than 40 units, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in gentlemen’s clubs and sports bars/restaurants. Clubs in New York City, Miami, Philadelphia, Charlotte, Dallas/Ft. Worth, Houston, Minneapolis, and other cities operate under brand names, such as “Rick’s Cabaret,” “XTC,” “Club Onyx,” “Vivid Cabaret,” “Jaguars” and “Tootsie’s Cabaret.” Sports bars/restaurants operate under the brand name “Bombshells Restaurant & Bar.” Investors are attracted by RCI’s strong cash flow, operating margins and local laws that create high barriers to entry in the gentlemen’s club business.
About Cosi
Cosi, Inc. is an international fast casual restaurant company. The Company offers its flatbread. Its menu features made-to-order sandwiches, hand-tossed salads, bowls, breakfast wraps, melts, soups, signature Squagels, artisan flatbread pizzas, S’mores, snacks and desserts. It also offers handcrafted beverages and a variety of coffee-based and specialty beverages. Its sandwiches include tbm, turkey and brie, tuna, turkey avocado and chicken parmesan melt. Its cosi salads are made with fresh ingredients and its own signature dressings. Its soups include tomato basil, turkey chili, smart fit chicken noodle, and mediterranean lentil. Its handcrafted beverages include iced tea, raspberry iced tea, country club iced tea, mojito lemonade, raspberry mojito lemonade. It also offers catering services to its customers. The Company operates in 43 Company-owned and 30 franchise restaurants in fourteen states in the United States, the District of Columbia, Costa Rica and the United Arab Emirates.
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