Contrasting Bloomin’ Brands (NASDAQ:BLMN) and Del Frisco’s Restaurant Group (NASDAQ:DFRG)

Bloomin’ Brands (NASDAQ:BLMN) and Del Frisco’s Restaurant Group (NASDAQ:DFRG) are both small-cap retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, profitability, analyst recommendations, institutional ownership and valuation.

Insider & Institutional Ownership

94.2% of Bloomin’ Brands shares are held by institutional investors. 4.4% of Bloomin’ Brands shares are held by insiders. Comparatively, 2.0% of Del Frisco’s Restaurant Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Bloomin’ Brands and Del Frisco’s Restaurant Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bloomin’ Brands 2 3 7 0 2.42
Del Frisco’s Restaurant Group 0 4 0 0 2.00

Bloomin’ Brands currently has a consensus price target of $21.67, suggesting a potential upside of 17.75%. Del Frisco’s Restaurant Group has a consensus price target of $10.25, suggesting a potential upside of 29.09%. Given Del Frisco’s Restaurant Group’s higher possible upside, analysts plainly believe Del Frisco’s Restaurant Group is more favorable than Bloomin’ Brands.

Valuation and Earnings

This table compares Bloomin’ Brands and Del Frisco’s Restaurant Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bloomin’ Brands $4.13 billion 0.41 $107.10 million $1.50 12.27
Del Frisco’s Restaurant Group $378.22 million 0.70 -$76.30 million ($0.18) -44.11

Bloomin’ Brands has higher revenue and earnings than Del Frisco’s Restaurant Group. Del Frisco’s Restaurant Group is trading at a lower price-to-earnings ratio than Bloomin’ Brands, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Bloomin’ Brands and Del Frisco’s Restaurant Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bloomin’ Brands 2.56% 124.00% 5.29%
Del Frisco’s Restaurant Group -21.62% -1.15% -0.36%

Dividends

Bloomin’ Brands pays an annual dividend of $0.40 per share and has a dividend yield of 2.2%. Del Frisco’s Restaurant Group does not pay a dividend. Bloomin’ Brands pays out 26.7% of its earnings in the form of a dividend. Bloomin’ Brands has raised its dividend for 3 consecutive years.

Volatility & Risk

Bloomin’ Brands has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500. Comparatively, Del Frisco’s Restaurant Group has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.

Summary

Bloomin’ Brands beats Del Frisco’s Restaurant Group on 13 of the 17 factors compared between the two stocks.

Bloomin’ Brands Company Profile

Bloomin' Brands, Inc., through its subsidiaries, owns and operates casual, upscale casual, and fine dining restaurants in the United States and internationally. The company operates through two segments, U.S. and International. Its restaurant portfolio has four concepts, including Outback Steakhouse, a casual steakhouse restaurant; Carrabba's Italian Grill, a casual Italian restaurant; Bonefish Grill, an upscale casual seafood restaurant; and Fleming's Prime Steakhouse & Wine Bar, a contemporary steakhouse. As of December 31, 2017, the company owned and operated 1,075 restaurants and franchised 165 restaurants. Bloomin' Brands, Inc. was incorporated in 2006 and is headquartered in Tampa, Florida.

Del Frisco’s Restaurant Group Company Profile

Del Frisco's Restaurant Group, Inc. develops, owns, and operates restaurants in the United States. It owns and operates restaurants under the Del Frisco's Double Eagle Steak House, Del Frisco's Grille, Barcelona Wine Bar, and bartaco brand names. The company offers steaks, as well as other menu selections, such as chops, fresh seafood, tapas, street food, and wines and cocktails. As of November 6, 2018, it operated 69 restaurants in 16 states and the District of Columbia. The company was founded in 1981 and is headquartered in Irving, Texas.

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