Dave & Buster’s Entertainment (NASDAQ:PLAY) and Carrols Restaurant Group (NASDAQ:TAST) are both small-cap retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, earnings, profitability, institutional ownership and dividends.

Earnings & Valuation

This table compares Dave & Buster’s Entertainment and Carrols Restaurant Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dave & Buster’s Entertainment $1.27 billion 1.11 $117.22 million $2.93 13.18
Carrols Restaurant Group $1.18 billion 0.28 $10.10 million $0.30 24.40

Dave & Buster’s Entertainment has higher revenue and earnings than Carrols Restaurant Group. Dave & Buster’s Entertainment is trading at a lower price-to-earnings ratio than Carrols Restaurant Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for Dave & Buster’s Entertainment and Carrols Restaurant Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dave & Buster’s Entertainment 0 5 7 0 2.58
Carrols Restaurant Group 0 0 3 0 3.00

Dave & Buster’s Entertainment presently has a consensus price target of $52.52, indicating a potential upside of 35.95%. Carrols Restaurant Group has a consensus price target of $14.50, indicating a potential upside of 98.09%. Given Carrols Restaurant Group’s stronger consensus rating and higher possible upside, analysts clearly believe Carrols Restaurant Group is more favorable than Dave & Buster’s Entertainment.

Volatility & Risk

Dave & Buster’s Entertainment has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, Carrols Restaurant Group has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500.

Insider and Institutional Ownership

72.9% of Carrols Restaurant Group shares are owned by institutional investors. 3.7% of Dave & Buster’s Entertainment shares are owned by insiders. Comparatively, 22.0% of Carrols Restaurant Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Dave & Buster’s Entertainment pays an annual dividend of $0.60 per share and has a dividend yield of 1.6%. Carrols Restaurant Group does not pay a dividend. Dave & Buster’s Entertainment pays out 20.5% of its earnings in the form of a dividend.

Profitability

This table compares Dave & Buster’s Entertainment and Carrols Restaurant Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dave & Buster’s Entertainment 9.06% 29.12% 7.87%
Carrols Restaurant Group -0.77% 0.19% 0.05%

Summary

Dave & Buster’s Entertainment beats Carrols Restaurant Group on 10 of the 16 factors compared between the two stocks.

About Dave & Buster’s Entertainment

Dave & Buster's Entertainment, Inc. owns and operates entertainment and dining venues for adults and families. Its venues offer a menu of entrées and appetizers, as well as a selection of non-alcoholic and alcoholic beverages; and an assortment of entertainment attractions centered on playing games and watching live sports, and other televised events. The company operates its venues under the Dave & Buster's name. As of April 02, 2019, it owned and operated 125 venues in 39 states, Puerto Rico, and Canada. The company was founded in 1982 and is headquartered in Dallas, Texas.

About Carrols Restaurant Group

Carrols Restaurant Group, Inc., through its subsidiaries, operates franchisee restaurants of Burger King in the United States. As of May 7, 2019, it owned and operated 1,010 Burger King and 55 Popeyes restaurants in 23 states.. The company was founded in 1960 and is headquartered in Syracuse, New York.

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