FAT Brands (NASDAQ:FAT) & Meritage Hospitality Group (NASDAQ:MHGU) Financial Contrast

FAT Brands (NASDAQ:FAT) and Meritage Hospitality Group (OTCMKTS:MHGU) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Analyst Ratings

This is a breakdown of current recommendations and price targets for FAT Brands and Meritage Hospitality Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FAT Brands 0 0 0 0 N/A
Meritage Hospitality Group 0 0 0 0 N/A

Valuation and Earnings

This table compares FAT Brands and Meritage Hospitality Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FAT Brands $18.37 million 3.19 -$1.80 million N/A N/A
Meritage Hospitality Group $435.30 million 0.24 $13.01 million N/A N/A

Meritage Hospitality Group has higher revenue and earnings than FAT Brands.

Institutional & Insider Ownership

1.2% of FAT Brands shares are held by institutional investors. 1.3% of FAT Brands 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.

Dividends

FAT Brands pays an annual dividend of $0.24 per share and has a dividend yield of 4.8%. Meritage Hospitality Group does not pay a dividend.

Profitability

This table compares FAT Brands and Meritage Hospitality Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FAT Brands -18.01% -64.26% -6.26%
Meritage Hospitality Group 2.94% 20.71% 2.99%

Risk and Volatility

FAT Brands has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, Meritage Hospitality Group has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500.

FAT Brands Company Profile

FAT Brands Inc., a multi-brand franchising company, acquires, markets, and develops fast casual and casual dining restaurant concepts. As of April 22, 2019, it owned 7 restaurant brands, including Fatburger, Buffalo's Cafe, Buffalo's Express, Hurricane Grill & Wings, Yalla Mediterranean, Ponderosa Steakhouse, and Bonanza Steakhouse with approximately 300 locations open and 200 under development worldwide. The company was founded in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. is a subsidiary of Fog Cutter Capital Group Inc.

Meritage Hospitality Group Company Profile

Meritage Hospitality Group Inc. operates quick-service and casual dining restaurants. The company operates restaurants under the Wendy's, Twisted Rooster, Crooked Goose, Freighters Eatery & Taproom, and Wheelhouse Kitchen & Cocktails brand names. As of November 13, 2018, it operated 314 restaurants in Arkansas, Connecticut, Florida, Georgia, Indiana, Massachusetts, Michigan, Missouri, Mississippi, North Carolina, South Carolina, Ohio, Oklahoma, Tennessee, Texas, and Virginia. The company was formerly known as Thomas Edison Inns, Inc. and changed its name to Meritage Hospitality Group Inc. in May 1996. Meritage Hospitality Group Inc. was incorporated in 1986 and is headquartered in Grand Rapids, Michigan.

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