Financial Survey: Carrols Restaurant Group (NASDAQ:TAST) and Habit Restaurants (HABT)

Habit Restaurants (NASDAQ:HABT) and Carrols Restaurant Group (NASDAQ:TAST) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, institutional ownership, valuation, analyst recommendations and risk.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Habit Restaurants and Carrols Restaurant Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Habit Restaurants 0 3 3 0 2.50
Carrols Restaurant Group 0 0 3 0 3.00

Habit Restaurants currently has a consensus target price of $15.14, suggesting a potential upside of 1.02%. Carrols Restaurant Group has a consensus target price of $19.00, suggesting a potential upside of 68.14%. Given Carrols Restaurant Group’s stronger consensus rating and higher probable upside, analysts clearly believe Carrols Restaurant Group is more favorable than Habit Restaurants.

Profitability

This table compares Habit Restaurants and Carrols Restaurant Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Habit Restaurants -1.06% 2.54% 1.23%
Carrols Restaurant Group 1.06% 8.75% 2.56%

Earnings & Valuation

This table compares Habit Restaurants and Carrols Restaurant Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Habit Restaurants $331.70 million 1.18 -$2.80 million $0.16 93.69
Carrols Restaurant Group $1.09 billion 0.38 $7.15 million $0.20 56.50

Carrols Restaurant Group has higher revenue and earnings than Habit Restaurants. Carrols Restaurant Group is trading at a lower price-to-earnings ratio than Habit Restaurants, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

59.5% of Habit Restaurants shares are owned by institutional investors. Comparatively, 85.8% of Carrols Restaurant Group shares are owned by institutional investors. 16.0% of Habit Restaurants shares are owned by company insiders. Comparatively, 4.6% of Carrols Restaurant Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Habit Restaurants has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, Carrols Restaurant Group has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500.

Summary

Carrols Restaurant Group beats Habit Restaurants on 9 of the 13 factors compared between the two stocks.

Habit Restaurants Company Profile

The Habit Restaurants, Inc., a holding company, operates and franchises fast casual restaurants under The Habit Burger Grill name. It specializes in offering made-to-order char-grilled burgers and sandwiches featuring choice tri-tip steak, grilled chicken, and sushi-grade tuna cooked over an open flame; and salads, as well as sides, shakes, and malts. As of June 26, 2018, the company had 235 restaurants in California, Arizona, Utah, New Jersey, Florida, Idaho, Virginia, Nevada, Washington, Maryland, and Pennsylvania, as well as 4 international locations. The Habit Restaurants, Inc. was founded in 1969 and is headquartered in Irvine, California.

Carrols Restaurant Group Company Profile

Carrols Restaurant Group, Inc., through its subsidiaries, operates franchisee restaurants of Burger King in the United States. As of July 1, 2018, it owned and operated 807 BURGER KING restaurants. The company was founded in 1960 and is headquartered in Syracuse, New York.

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