Reviewing Diversified Restaurant (SAUC) & Jack in the Box (JACK)

Diversified Restaurant (NASDAQ: SAUC) and Jack in the Box (NASDAQ:JACK) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.

Volatility & Risk

Diversified Restaurant has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500. Comparatively, Jack in the Box has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500.



Analyst Recommendations

This is a summary of current recommendations and price targets for Diversified Restaurant and Jack in the Box, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Diversified Restaurant 0 0 0 0 N/A
Jack in the Box 0 7 8 0 2.53

Jack in the Box has a consensus price target of $105.08, indicating a potential upside of 21.78%. Given Jack in the Box’s higher probable upside, analysts clearly believe Jack in the Box is more favorable than Diversified Restaurant.

Institutional and Insider Ownership

10.7% of Diversified Restaurant shares are held by institutional investors. Comparatively, 96.4% of Jack in the Box shares are held by institutional investors. 50.0% of Diversified Restaurant shares are held by insiders. Comparatively, 2.6% of Jack in the Box shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Jack in the Box pays an annual dividend of $1.60 per share and has a dividend yield of 1.9%. Diversified Restaurant does not pay a dividend. Jack in the Box pays out 41.2% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Diversified Restaurant and Jack in the Box’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Diversified Restaurant $165.46 million 0.20 -$20.45 million ($0.05) -24.00
Jack in the Box $1.55 billion 1.58 $135.33 million $3.88 22.24

Jack in the Box has higher revenue and earnings than Diversified Restaurant. Diversified Restaurant is trading at a lower price-to-earnings ratio than Jack in the Box, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Diversified Restaurant and Jack in the Box’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Diversified Restaurant -13.13% -4.31% -1.60%
Jack in the Box 10.50% -27.25% 9.85%

Summary

Jack in the Box beats Diversified Restaurant on 11 of the 15 factors compared between the two stocks.

About Diversified Restaurant

Diversified Restaurant Holdings, Inc., a restaurant company, operates Buffalo Wild Wings franchised restaurants in the United States. The company primarily offers fresh bone-in chicken wings, frozen boneless chicken, and potatoes. As of March 8, 2018, it operated 65 franchised restaurants in Florida, Illinois, Indiana, Michigan, and Missouri. The company was founded in 1999 and is headquartered in Southfield, Michigan.

About Jack in the Box

Jack in the Box Inc. operates and franchises Jack in the Box quick-service restaurants and Qdoba Mexican Eats fast-casual restaurants primarily in the United States. As of October 01, 2017, it operated and franchised approximately 2,251 Jack in the Box restaurants in 21 states and Guam; and approximately 726 Qdoba Mexican Eats restaurants in 47 states, the District of Columbia, and Canada. The company was founded in 1951 and is based in San Diego, California.

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