Head-To-Head Review: GEN Restaurant Group (NASDAQ:GENK) & Nathan’s Famous (NASDAQ:NATH)

GEN Restaurant Group (NASDAQ:GENK) and Nathan’s Famous (NASDAQ:NATH) are both small-cap retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, risk and dividends.

Analyst Ratings

This is a summary of current ratings and recommmendations for GEN Restaurant Group and Nathan’s Famous, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GEN Restaurant Group	0	0	3	0	3.00
Nathan’s Famous	0	0	0	0	0.00

GEN Restaurant Group currently has a consensus price target of $13.17, indicating a potential upside of 142.03%. Given GEN Restaurant Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe GEN Restaurant Group is more favorable than Nathan’s Famous.

Earnings & Valuation

This table compares GEN Restaurant Group and Nathan’s Famous”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GEN Restaurant Group	$198.83 million	0.90	$8.41 million	$0.17	32.00
Nathan’s Famous	$146.39 million	2.76	$19.62 million	$5.80	17.02

Nathan’s Famous has lower revenue, but higher earnings than GEN Restaurant Group. Nathan’s Famous is trading at a lower price-to-earnings ratio than GEN Restaurant Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares GEN Restaurant Group and Nathan’s Famous’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GEN Restaurant Group	0.39%	1.83%	0.37%
Nathan’s Famous	16.19%	-96.05%	44.34%

Risk & Volatility

GEN Restaurant Group has a beta of 1.89, meaning that its share price is 89% more volatile than the S&P 500. Comparatively, Nathan’s Famous has a beta of 0.25, meaning that its share price is 75% less volatile than the S&P 500.

Insider and Institutional Ownership

10.2% of GEN Restaurant Group shares are held by institutional investors. Comparatively, 66.5% of Nathan’s Famous shares are held by institutional investors. 61.1% of GEN Restaurant Group shares are held by company insiders. Comparatively, 30.7% of Nathan’s Famous shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

GEN Restaurant Group beats Nathan’s Famous on 8 of the 14 factors compared between the two stocks.

About GEN Restaurant Group

GEN Restaurant Group, Inc. operates restaurants in California, Arizona, Hawaii, Nevada, Texas, New York, and Florida. It offers meats, poultry, and seafood. The company was founded in 2011 and is based in Cerritos, California.

About Nathan’s Famous

Nathan’s Famous, Inc. engages in the operation of franchised fast-food units. It is involved in the licensing, wholesaling, and retailing of products marketed under the Nathan’s Famous brand. The firm operates through the following business segments: Branded Product Program, Product Licensing, Restaurant Operations, and Corporate. The Branded Product Program segment markets and sells hot dog products. The Product Licensing segment is composed of royalties from licensing a variety of Nathan’s Famous products such as hotdogs, sausage and corned beef products, frozen French fries, and additional products through retail grocery channels and club stores. The Restaurant Operations segment deals with the sale of products at company-owned restaurants and fees and royalties from franchised restaurants. The Corporate segment includes administrative expenses such as executive management, finance, information technology, legal, insurance, corporate office costs, corporate incentive compensation, and compliance costs. The company was founded by Nathan Handwerker in 1916 and is headquartered in Jericho, NY.