Financial Survey: First Watch Restaurant Group (NASDAQ:FWRG) and Dine Brands Global (NYSE:DIN)

First Watch Restaurant Group (NASDAQ:FWRG) and Dine Brands Global (NYSE:DIN) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, dividends, profitability, earnings, risk, analyst recommendations and institutional ownership.

Volatility & Risk

First Watch Restaurant Group has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, Dine Brands Global has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.

Profitability

This table compares First Watch Restaurant Group and Dine Brands Global’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Watch Restaurant Group	1.45%	3.10%	1.09%
Dine Brands Global	0.43%	-19.01%	3.14%

Institutional and Insider Ownership

96.1% of First Watch Restaurant Group shares are owned by institutional investors. Comparatively, 92.8% of Dine Brands Global shares are owned by institutional investors. 6.1% of First Watch Restaurant Group shares are owned by insiders. Comparatively, 6.7% of Dine Brands Global shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares First Watch Restaurant Group and Dine Brands Global”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Watch Restaurant Group	$1.22 billion	0.67	$19.43 million	$0.32	41.19
Dine Brands Global	$879.30 million	0.52	$17.10 million	$0.36	103.12

First Watch Restaurant Group has higher revenue and earnings than Dine Brands Global. First Watch Restaurant Group is trading at a lower price-to-earnings ratio than Dine Brands Global, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for First Watch Restaurant Group and Dine Brands Global, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Watch Restaurant Group	0	2	9	2	3.00
Dine Brands Global	1	9	0	0	1.90

First Watch Restaurant Group currently has a consensus price target of $18.18, suggesting a potential upside of 37.95%. Dine Brands Global has a consensus price target of $33.25, suggesting a potential downside of 10.44%. Given First Watch Restaurant Group’s stronger consensus rating and higher probable upside, equities analysts plainly believe First Watch Restaurant Group is more favorable than Dine Brands Global.

Summary

First Watch Restaurant Group beats Dine Brands Global on 12 of the 15 factors compared between the two stocks.

About First Watch Restaurant Group

First Watch Restaurant Group operates restaurants specializing in breakfast, brunch and lunch. Its First Watch restaurants serve made-to-order meals, including eggs, pancakes, sandwiches, salads and other daytime fare, with an emphasis on fresh ingredients. The company was founded in 1983 and is headquartered in Bradenton, Florida. It has expanded its restaurant operations across the United States and became a publicly traded company in 2021. First Watch is led by President and Chief Executive Officer Chris Tomasso.

About Dine Brands Global

Dine Brands Global is a restaurant company that franchises and operates Applebee’s Neighborhood Grill + Bar, IHOP and Fuzzy’s Taco Shop. Its brands serve a range of meals, including casual-dining fare, breakfast and pancakes, and Mexican-inspired food. The company’s business centers on its restaurant brands and franchise network, supported by services such as marketing, training and operational guidance for franchisees. IHOP traces its history to 1958, and the company added Applebee’s in 2007. DineEquity adopted the Dine Brands Global name in 2018, and Fuzzy’s Taco Shop joined its portfolio in 2022.