Head to Head Review: FAT Brands (NASDAQ:FAT) versus Bojangles (NASDAQ:BOJA)

FAT Brands (NASDAQ:FAT) and Bojangles (NASDAQ:BOJA) are both small-cap retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.

Insider & Institutional Ownership

1.2% of FAT Brands shares are held by institutional investors. Comparatively, 90.5% of Bojangles shares are held by institutional investors. 1.3% of FAT Brands shares are held by company insiders. Comparatively, 52.9% of Bojangles shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares FAT Brands and Bojangles’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FAT Brands -18.01% -64.26% -6.26%
Bojangles 9.42% 9.95% 5.18%

Volatility and Risk

FAT Brands has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, Bojangles has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500.

Dividends

FAT Brands pays an annual dividend of $0.12 per share and has a dividend yield of 2.5%. Bojangles does not pay a dividend.

Valuation & Earnings

This table compares FAT Brands and Bojangles’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FAT Brands $18.37 million 3.05 -$1.80 million N/A N/A
Bojangles $547.44 million 0.00 $72.00 million $0.83 N/A

Bojangles has higher revenue and earnings than FAT Brands.

Analyst Recommendations

This is a breakdown of current ratings for FAT Brands and Bojangles, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FAT Brands 0 0 0 0 N/A
Bojangles 0 1 0 0 2.00

Bojangles has a consensus target price of $16.00, indicating a potential upside of ∞. Given Bojangles’ higher probable upside, analysts plainly believe Bojangles is more favorable than FAT Brands.

Summary

Bojangles beats FAT Brands on 8 of the 10 factors compared between the two stocks.

FAT Brands Company Profile

FAT Brands Inc., a multi-brand franchising company, acquires, markets, and develops fast casual and casual dining restaurant concepts. As of April 22, 2019, it owned 7 restaurant brands, including Fatburger, Buffalo's Cafe, Buffalo's Express, Hurricane Grill & Wings, Yalla Mediterranean, Ponderosa Steakhouse, and Bonanza Steakhouse with approximately 300 locations open and 200 under development worldwide. The company was founded in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. is a subsidiary of Fog Cutter Capital Group Inc.

Bojangles Company Profile

Bojangles', Inc. develops, operates, and franchises limited service restaurants in the United States. Its restaurants offer made-from-scratch biscuit breakfast sandwiches, hand-breaded bone-in chicken, fixin's, and iced tea. As of July 1, 2018, the company operated 766 system-wide restaurants, including 325 company-operated and 441 franchised restaurants primarily located in the Southeastern United States. Bojangles', Inc. was founded in 1977 and is headquartered in Charlotte, North Carolina.

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