Red Robin Gourmet Burgers (NASDAQ:RRGB) and Luby’s (NYSE:LUB) 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, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.
Volatility and Risk
Red Robin Gourmet Burgers has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, Luby’s has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.
This table compares Red Robin Gourmet Burgers and Luby’s’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Red Robin Gourmet Burgers||$1.38 billion||0.33||$30.01 million||$2.49||13.89|
|Luby’s||$376.03 million||0.10||-$23.26 million||N/A||N/A|
Red Robin Gourmet Burgers has higher revenue and earnings than Luby’s.
Insider & Institutional Ownership
36.1% of Luby’s shares are held by institutional investors. 2.7% of Red Robin Gourmet Burgers shares are held by insiders. Comparatively, 35.2% of Luby’s shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This table compares Red Robin Gourmet Burgers and Luby’s’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Red Robin Gourmet Burgers||0.95%||6.96%||3.11%|
This is a breakdown of current ratings and price targets for Red Robin Gourmet Burgers and Luby’s, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Red Robin Gourmet Burgers||0||8||4||0||2.33|
Red Robin Gourmet Burgers presently has a consensus price target of $47.73, suggesting a potential upside of 38.02%. Given Red Robin Gourmet Burgers’ higher probable upside, research analysts clearly believe Red Robin Gourmet Burgers is more favorable than Luby’s.
Red Robin Gourmet Burgers beats Luby’s on 8 of the 11 factors compared between the two stocks.
Red Robin Gourmet Burgers Company Profile
Red Robin Gourmet Burgers, Inc., together with its subsidiaries, develops, operates, and franchises full-service and casual-dining restaurants in the United States and Canada. As of December 31, 2017, it operated 480 company-owned restaurants located in 39 states and 2 Canadian provinces; and had 86 casual-dining restaurants operated by franchisees in 15 states. The company was founded in 1969 and is headquartered in Greenwood Village, Colorado.
Luby’s Company Profile
Luby's, Inc. operates as a multi-brand restaurant company in the United States. The company operates through three segments: Company-Owned Restaurants, Franchise Operations, and Culinary Contract Services. Its primary brands include Luby's Cafeteria, Fuddruckers – World's Greatest Hamburgers, and Luby's Culinary Contract Services; and other brands comprise Cheeseburger in Paradise. The company also provides culinary contract services consisting of contract arrangements to manage food services for clients operating in healthcare, higher education, and corporate dining businesses. As of November 7, 2017, it owned and operated 163 restaurants; operated 23 locations through Culinary Contract Services; and franchised 110 Fuddruckers restaurants. The company was formerly known as Luby's Cafeterias, Inc. Luby's, Inc. was founded in 1947 and is headquartered in Houston, Texas.
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