Bojangles’ (NASDAQ: BOJA) and Ruby Tuesday (NYSE:RT) 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 analyst recommendations, dividends, institutional ownership, earnings, profitability, valuation and risk.

Risk and Volatility

Bojangles’ has a beta of 1.97, suggesting that its share price is 97% more volatile than the S&P 500. Comparatively, Ruby Tuesday has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500.

Insider and Institutional Ownership

91.4% of Bojangles’ shares are owned by institutional investors. Comparatively, 75.8% of Ruby Tuesday shares are owned by institutional investors. 55.3% of Bojangles’ shares are owned by company insiders. Comparatively, 4.8% of Ruby Tuesday shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Bojangles’ and Ruby Tuesday’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bojangles’ 6.70% 17.05% 6.47%
Ruby Tuesday -4.53% -13.05% -5.54%

Analyst Ratings

This is a breakdown of current ratings and price targets for Bojangles’ and Ruby Tuesday, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bojangles’ 0 8 2 0 2.20
Ruby Tuesday 0 0 0 0 N/A

Bojangles’ presently has a consensus target price of $18.13, indicating a potential upside of 47.96%. Given Bojangles”s higher probable upside, equities analysts clearly believe Bojangles’ is more favorable than Ruby Tuesday.

Earnings and Valuation

This table compares Bojangles’ and Ruby Tuesday’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Bojangles’ $538.50 million 0.84 $79.81 million $0.95 12.89
Ruby Tuesday $912.62 million 0.16 $37.10 million ($1.26) -1.88

Bojangles’ has higher revenue, but lower earnings than Ruby Tuesday. Ruby Tuesday is trading at a lower price-to-earnings ratio than Bojangles’, indicating that it is currently the more affordable of the two stocks.

Summary

Bojangles’ beats Ruby Tuesday on 11 of the 12 factors compared between the two stocks.

About Bojangles’

Bojangles’, Inc. is a restaurant operator and franchisor. The Company offers food made from its Southern recipes. The Company’s menu includes its made-from-scratch, buttermilk biscuits baked fresh every 20 minutes; its fresh, never-frozen bone-in fried chicken; its fixin’s; its Bo-Smart menu featuring items, such as salads, grilled chicken sandwiches, roasted chicken bites and fat-free green beans; its freshly baked and delicious sweets menu, and its Legendary Iced Tea. The Company’s food is offered a la carte and in combos. The Company’s chicken, fixin’s, biscuits and Legendary Iced Tea may also be ordered in boxes or family meals, and larger combinations may be offered as tailgate specials or may be packaged in its Big Bo Box. The Company offers Southern style mac ‘n cheese made from two cheeses; fat-free green beans; cole slaw, and mashed potatoes with gravy. Its menu also features salads, sandwiches and its whole meat Roasted Chicken Bites.

About Ruby Tuesday

Ruby Tuesday, Inc. owns and operates Ruby Tuesday casual dining and Lime Fresh Mexican Grill (Lime Fresh) casual restaurants. The Company also franchises the Ruby Tuesday concept in selected domestic and international markets, and the Lime Fresh concept in selected domestic markets. Its segments include Ruby Tuesday concept and Lime Fresh concept. As of March 1, 2016, the Company operated 729 Ruby Tuesday restaurants in 44 states, 13 foreign countries, and Guam, and there were 16 Lime Fresh restaurants in two states. Of those restaurants, it owned and operated approximately 649 Ruby Tuesday restaurants and franchised over 80 Ruby Tuesday restaurants, which consisted of 28 domestic and 52 international restaurants. It also owned and operated over eight Lime Fresh restaurants and franchised eight Lime Fresh domestic restaurants. The Company’s corporate-owned and operated restaurants are concentrated primarily in the Southeast, Northeast, Mid-Atlantic and Midwest of the United States.

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