Critical Review: Bloomin’ Brands (BLMN) versus Noble Roman’s (NROM)

Bloomin’ Brands (NASDAQ:BLMN) and Noble Roman’s (OTCMKTS:NROM) 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 profitability, earnings, institutional ownership, dividends, valuation, analyst recommendations and risk.

Dividends

Bloomin’ Brands pays an annual dividend of $0.36 per share and has a dividend yield of 1.8%. Noble Roman’s does not pay a dividend. Bloomin’ Brands pays out 26.5% of its earnings in the form of a dividend. Bloomin’ Brands has raised its dividend for 2 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Bloomin’ Brands and Noble Roman’s, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bloomin’ Brands 0 9 2 0 2.18
Noble Roman’s 0 0 0 0 N/A

Bloomin’ Brands presently has a consensus target price of $22.67, indicating a potential upside of 15.59%. Given Bloomin’ Brands’ higher probable upside, analysts plainly believe Bloomin’ Brands is more favorable than Noble Roman’s.

Profitability

This table compares Bloomin’ Brands and Noble Roman’s’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bloomin’ Brands 2.70% 215.75% 6.24%
Noble Roman’s -29.59% -27.48% -16.39%

Volatility & Risk

Bloomin’ Brands has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500. Comparatively, Noble Roman’s has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500.

Valuation and Earnings

This table compares Bloomin’ Brands and Noble Roman’s’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bloomin’ Brands $4.21 billion 0.43 $100.24 million $1.36 14.42
Noble Roman’s $9.84 million 1.33 -$3.38 million N/A N/A

Bloomin’ Brands has higher revenue and earnings than Noble Roman’s.

Insider & Institutional Ownership

97.3% of Bloomin’ Brands shares are owned by institutional investors. Comparatively, 0.3% of Noble Roman’s shares are owned by institutional investors. 7.5% of Bloomin’ Brands shares are owned by company insiders. Comparatively, 30.1% of Noble Roman’s shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Bloomin’ Brands beats Noble Roman’s on 10 of the 14 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.

Noble Roman’s Company Profile

Noble Roman's, Inc. sells and services franchises and licenses, and operates foodservice locations for non-traditional foodservice operations and stand-alone restaurants. The company franchises, licenses, and operates under the Noble Roman's Craft Pizza & Pub, Noble Roman's Pizza, Noble Roman's Take-N-Bake, and Tuscano's Italian Style Subs trade names, which provide pizza, pasta, salads, sub sandwiches, and other related menu items. As of December 31, 2017, it operated 2,854 franchised or licensed outlets. The company has operations in 50 states of the United States. Noble Roman's, Inc. was incorporated in 1972 and is headquartered in Indianapolis, Indiana.

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