Head to Head Analysis: Wingstop (WING) versus Red Robin Gourmet Burgers (RRGB)

Wingstop (NASDAQ: WING) and Red Robin Gourmet Burgers (NASDAQ:RRGB) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Earnings & Valuation

This table compares Wingstop and Red Robin Gourmet Burgers’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Wingstop $97.80 million 10.32 $35.13 million $0.64 54.25
Red Robin Gourmet Burgers $1.32 billion 0.62 $131.93 million $0.64 98.28

Red Robin Gourmet Burgers has higher revenue and earnings than Wingstop. Wingstop is trading at a lower price-to-earnings ratio than Red Robin Gourmet Burgers, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Wingstop and Red Robin Gourmet Burgers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wingstop 19.28% -28.04% 17.56%
Red Robin Gourmet Burgers 0.64% 8.00% 3.18%

Volatility & Risk

Wingstop has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, Red Robin Gourmet Burgers has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Dividends

Wingstop pays an annual dividend of $0.07 per share and has a dividend yield of 0.2%. Red Robin Gourmet Burgers does not pay a dividend. Wingstop pays out 10.9% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Wingstop and Red Robin Gourmet Burgers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wingstop 0 2 5 1 2.88
Red Robin Gourmet Burgers 0 4 6 0 2.60

Wingstop presently has a consensus target price of $34.29, suggesting a potential downside of 1.25%. Red Robin Gourmet Burgers has a consensus target price of $72.67, suggesting a potential upside of 15.53%. Given Red Robin Gourmet Burgers’ higher possible upside, analysts clearly believe Red Robin Gourmet Burgers is more favorable than Wingstop.

Summary

Red Robin Gourmet Burgers beats Wingstop on 8 of the 14 factors compared between the two stocks.

About Wingstop

Wingstop Inc. is franchisor and operator of restaurants that specializes in cooked-to-order, hand-sauced and tossed chicken wings. The Company operates through two segments: Franchise and Company. As of December 31, 2016, the Company offers its guests 11 flavors on bone-in and boneless chicken wings paired with hand-cut, seasoned fries and sides. It is a casual chicken wings-focused restaurant chain with various concepts, which include wings as add-on menu items or focus on wings in a bar or sports-centric setting. The flavors include Atomic, Mango Habanero, Cajun, Original Hot, Louisiana Rub, Mild, Hickory Smoked BBQ, Lemon Pepper, Garlic Parmesan, Hawaiian and Teriyaki. It offers various order options, including eat-in, to go, individual, combo meals and family packs. The Company maintains Website hosting, and manages the development and maintenance of the mobile Wingstop application. It markets Wingstop products, services and restaurants through the Website, www.wingstop.com.

About Red Robin Gourmet Burgers

Red Robin Gourmet Burgers, Inc., together with its subsidiaries, primarily develops, operates, and franchises full-service restaurants in North America and focuses on serving selection of gourmet burgers. The Company’s menu features a line of gourmet burgers, which it makes from ground beef, as well as its line of Red’s Tavern Double Burgers and its Red Robin’s line of half-pound Angus beef burgers with various toppings. The Company also offers burgers made from chicken breasts, fish fillets, turkey patties, as well as vegetarian and vegan options. The Company offered a selection of buns, including ciabatta, gluten free, sesame, onion, whole grain, jalapeno and lettuce wraps a range of toppings, including fresh guacamole, house made barbeque sauces, aiolis, grilled pineapple, crispy onion straws, sauteed mushrooms, fried jalapenos, bruschetta salsa, coleslaw, eight different cheese choices and a fried egg, as of December 25, 2016.

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