Wingstop (NASDAQ:WING) & Meritage Hospitality Group (OTCMKTS:MHGU) Financial Comparison

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

Analyst Recommendations

This is a summary of current ratings and target prices for Wingstop and Meritage Hospitality Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wingstop	0	11	8	0	2.42
Meritage Hospitality Group	0	0	1	0	3.00

Wingstop currently has a consensus target price of $336.53, suggesting a potential downside of 15.61%. Meritage Hospitality Group has a consensus target price of $24.00, suggesting a potential upside of 40.68%. Given Meritage Hospitality Group’s stronger consensus rating and higher possible upside, analysts clearly believe Meritage Hospitality Group is more favorable than Wingstop.

Earnings and Valuation

This table compares Wingstop and Meritage Hospitality Group’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wingstop	$460.05 million	25.40	$70.18 million	$2.81	141.92
Meritage Hospitality Group	$672.49 million	0.17	$6.14 million	N/A	N/A

Wingstop has higher earnings, but lower revenue than Meritage Hospitality Group.

Volatility & Risk

Wingstop has a beta of 1.7, meaning that its stock price is 70% more volatile than the S&P 500. Comparatively, Meritage Hospitality Group has a beta of 0.08, meaning that its stock price is 92% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Wingstop	16.75%	-19.64%	21.36%
Meritage Hospitality Group	1.31%	7.29%	1.09%

Summary

Wingstop beats Meritage Hospitality Group on 7 of the 11 factors compared between the two stocks.

About Wingstop

Wingstop Inc., together with its subsidiaries, franchises and operates restaurants under the Wingstop brand. Its restaurants offer classic wings, boneless wings, tenders, and hand-sauced-and-tossed in various flavors, as well as chicken sandwiches with fries and hand-cut carrots and celery that are cooked-to-order. The company was founded in 1994 and is headquartered in Addison, Texas.

About Meritage Hospitality Group

Meritage Hospitality Group Inc. operates quick-service and casual dining restaurants. The company operates restaurants under the Wendy's, Morning Belle, and Stan's Tacos, as well as Taco John's brand names in Arkansas, Connecticut, Florida, Georgia, Indiana, Massachusetts, Michigan, Missouri, Mississippi, North Carolina, South Carolina, Ohio, Oklahoma, Tennessee, Texas, and Virginia. It is also involved in franchising activities. 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 based in Grand Rapids, Michigan.