Rave Restaurant Group (NASDAQ:RAVE – Get Free Report) and Red Robin Gourmet Burgers (NASDAQ:RRGB – Get Free Report) are both small-cap retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, risk, earnings and dividends.
Profitability
This table compares Rave Restaurant Group and Red Robin Gourmet Burgers’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Rave Restaurant Group | 23.04% | 19.70% | 17.07% |
| Red Robin Gourmet Burgers | -4.31% | N/A | -3.17% |
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Rave Restaurant Group and Red Robin Gourmet Burgers, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Rave Restaurant Group | 0 | 1 | 0 | 0 | 2.00 |
| Red Robin Gourmet Burgers | 1 | 1 | 3 | 0 | 2.40 |
Valuation and Earnings
This table compares Rave Restaurant Group and Red Robin Gourmet Burgers”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Rave Restaurant Group | $12.04 million | 3.54 | $2.70 million | $0.20 | 15.00 |
| Red Robin Gourmet Burgers | $1.25 billion | 0.05 | -$77.54 million | ($3.23) | -1.15 |
Rave Restaurant Group has higher earnings, but lower revenue than Red Robin Gourmet Burgers. Red Robin Gourmet Burgers is trading at a lower price-to-earnings ratio than Rave Restaurant Group, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Rave Restaurant Group has a beta of 0.35, indicating that its share price is 65% less volatile than the S&P 500. Comparatively, Red Robin Gourmet Burgers has a beta of 2.32, indicating that its share price is 132% more volatile than the S&P 500.
Institutional & Insider Ownership
15.1% of Rave Restaurant Group shares are held by institutional investors. Comparatively, 84.0% of Red Robin Gourmet Burgers shares are held by institutional investors. 28.0% of Rave Restaurant Group shares are held by insiders. Comparatively, 2.6% of Red Robin Gourmet Burgers shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Summary
Rave Restaurant Group beats Red Robin Gourmet Burgers on 8 of the 14 factors compared between the two stocks.
About Rave Restaurant Group
Rave Restaurant Group, Inc., together with its subsidiaries, engages in the operation and franchising of pizza buffet, delivery/carry-out (delco), and express restaurants under the Pizza Inn and Pie Five trademarks in the United States and internationally. The company operates through three segments: Pizza Inn Franchising, Pie Five Franchising, and Company-Owned Restaurants. Its buffet restaurants are located in free standing buildings or strip centers in retail developments that offer dine-in, carryout, and catering services, as well as delivery services. The company’s delco restaurants provide delivery and carryout services and are located in shopping centers or other in-line retail developments. Its Express restaurants serve customers through various non-traditional points of sale and are located in convenience stores, food courts, college campuses, airport terminals, travel plazas, athletic facilities, or other commercial facilities. The company’s Pizza Inn Express restaurants serve customers through a non-traditional, licensed, pizza-only model called Pizza Inn Express, located at production-oriented facilities. In addition, it operates and franchises fast casual restaurants under the Pie Five Pizza Company or Pie Five trademarks. The company was formerly known as Pizza Inn Holdings, Inc. and changed its name to Rave Restaurant Group, Inc. in January 2015. Rave Restaurant Group, Inc. was founded in 1958 and is based in The Colony, Texas.
About Red Robin Gourmet Burgers
Red Robin Gourmet Burgers, Inc., together with its subsidiaries, develops, operates, and franchises casual-dining restaurants, in North America and one Canadian province. Its restaurants primarily offer burgers and pizza, appetizers, salads, soups, other entrees, desserts, wings, milkshakes, alcoholic and non-alcoholic specialty drinks, cocktails, wine, and beers. The company was founded in 1969 and is based in Englewood, Colorado.
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