Dutch Bros (NYSE:BROS – Get Free Report) and FAT Brands (NASDAQ:FATBB – Get Free Report) are both retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.
Profitability
This table compares Dutch Bros and FAT Brands’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Dutch Bros | 4.04% | 8.91% | 2.64% |
| FAT Brands | -39.33% | N/A | -17.57% |
Insider & Institutional Ownership
85.5% of Dutch Bros shares are owned by institutional investors. 42.4% of Dutch Bros shares are owned by company insiders. Comparatively, 59.9% of FAT Brands shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Dutch Bros | $1.28 billion | 8.01 | $35.26 million | $0.50 | 124.73 |
| FAT Brands | $592.65 million | 0.04 | -$189.85 million | ($13.35) | -0.09 |
Dutch Bros has higher revenue and earnings than FAT Brands. FAT Brands is trading at a lower price-to-earnings ratio than Dutch Bros, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Dutch Bros has a beta of 2.55, indicating that its stock price is 155% more volatile than the S&P 500. Comparatively, FAT Brands has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.
Analyst Ratings
This is a summary of recent recommendations for Dutch Bros and FAT Brands, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Dutch Bros | 0 | 4 | 19 | 1 | 2.88 |
| FAT Brands | 1 | 0 | 0 | 0 | 1.00 |
Dutch Bros currently has a consensus price target of $76.67, suggesting a potential upside of 22.93%. Given Dutch Bros’ stronger consensus rating and higher probable upside, analysts clearly believe Dutch Bros is more favorable than FAT Brands.
Summary
Dutch Bros beats FAT Brands on 14 of the 15 factors compared between the two stocks.
About Dutch Bros
Dutch Bros Inc., together with its subsidiaries, operates and franchises drive-thru shops in the United States. The company operates through Company-Operated Shops and Franchising and Other segments. It serves through company-operated shops and online channels under Dutch Bros; Dutch Bros Coffee; Dutch Bros Rebel; Dutch Bros; and Blue Rebel brands. Dutch Bros Inc. was founded in 1992 and is headquartered in Grants Pass, Oregon.
About FAT Brands
FAT Brands Inc., a multi-brand restaurant franchising company, acquires, develops, markets, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts worldwide. It owns restaurant brands, including Round Table Pizza, Marble Slab Creamery, Great American Cookies, Hot Dog on a Stick, Pretzelmaker, Fazoli's, Fatburger, Johnny Rockets, Elevation Burger, Yalla Mediterranean, Buffalo's Cafe and Buffalo's Express, Hurricane Grill & Wings, Ponderosa Steakhouse/Bonanza Steakhouse, Native Grill & Wings, Smokey Bones, and Twin Peaks. The company was incorporated in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. is a subsidiary of Fog Cutter Holdings, LLC.
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