Critical Comparison: Intergroup (NASDAQ:INTG) and Noodles & Company (NASDAQ:NDLS)

Noodles & Company (NASDAQ:NDLS) and Intergroup (NASDAQ:INTG) are both small-cap consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.

Profitability

This table compares Noodles & Company and Intergroup’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Noodles & Company	-4.71%	N/A	-3.40%
Intergroup	2.22%	-1.43%	1.60%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Noodles & Company and Intergroup, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Noodles & Company	1	1	0	0	1.50
Intergroup	0	1	0	0	2.00

Institutional & Insider Ownership

65.7% of Noodles & Company shares are held by institutional investors. Comparatively, 3.4% of Intergroup shares are held by institutional investors. 2.8% of Noodles & Company shares are held by insiders. Comparatively, 73.8% of Intergroup shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Noodles & Company and Intergroup”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Noodles & Company	$495.69 million	0.14	-$42.57 million	($4.01)	-2.88
Intergroup	$73.95 million	0.96	$1.64 million	$0.71	46.27

Intergroup has lower revenue, but higher earnings than Noodles & Company. Noodles & Company is trading at a lower price-to-earnings ratio than Intergroup, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Noodles & Company has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500. Comparatively, Intergroup has a beta of 0.06, suggesting that its stock price is 94% less volatile than the S&P 500.

Summary

Intergroup beats Noodles & Company on 8 of the 12 factors compared between the two stocks.

About Noodles & Company

Noodles & Co. engages in the business of development and operation of fast-casual restaurants that serve noodle and pasta dishes, soups, salads, and appetizers. The firm also offers pleasant dining, pick-up, and delivery experiences by quickly preparing fresh food with friendly service. The company was founded by Aaron Kennedy in 1995 and is headquartered in Broomfield, CO.

About Intergroup

The InterGroup Corporation, through its subsidiaries, operates a hotel under the Hilton San Francisco Financial District name located in San Francisco, California. The company operates through three segments: Hotel Operations, Real Estate Operations, and Investment Transactions. Its hotel consists of guest rooms and luxury suites, a restaurant, a lounge, a private dining room, meeting room space, a gym, a grand ballroom, 5-level underground parking garage, a pedestrian bridge, and a Chinese culture center. The company also invests in income-producing instruments, corporate debt and equity securities, publicly traded investment funds, mortgage-backed securities, securities issued by REITs, and other companies that invest primarily in real estate. In addition, it owns, manages, and invests in apartment complexes, single-family houses as strategic investments, and commercial real estate property located in the United States, as well as owns unimproved land in Maui, Hawaii. The InterGroup Corporation was founded in 1965 and is based in Los Angeles, California.