Head-To-Head Review: Giggles N’ Hugs (OTCMKTS:GIGL) & Nathan’s Famous (NASDAQ:NATH)

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Nathan’s Famous and Giggles N’ Hugs, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nathan’s Famous	0	0	1	0	3.00
Giggles N’ Hugs	0	0	0	0	0.00

Profitability

This table compares Nathan’s Famous and Giggles N’ Hugs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nathan’s Famous	13.59%	-182.42%	37.18%
Giggles N’ Hugs	N/A	N/A	N/A

Dividends

Nathan’s Famous pays an annual dividend of $2.00 per share and has a dividend yield of 2.0%. Giggles N’ Hugs pays an annual dividend of $1.72 per share and has a dividend yield of 3.4%. Nathan’s Famous pays out 38.5% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Nathan’s Famous and Giggles N’ Hugs”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nathan’s Famous	$157.78 million	2.62	$24.03 million	$5.20	19.42
Giggles N’ Hugs	N/A	N/A	N/A	N/A	N/A

Nathan’s Famous has higher revenue and earnings than Giggles N’ Hugs.

Institutional & Insider Ownership

66.5% of Nathan’s Famous shares are held by institutional investors. 30.7% of Nathan’s Famous shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Nathan’s Famous has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500. Comparatively, Giggles N’ Hugs has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500.

Summary

Nathan’s Famous beats Giggles N’ Hugs on 7 of the 11 factors compared between the two stocks.

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.

About Giggles N’ Hugs

Giggles N’ Hugs, Inc. engages in the ownership and operation of restaurants. It offers an upscale family-friendly atmosphere with a play area dedicated to children ages 10 and younger. The restaurant has a menu made from fresh, organic foods with the play elements and entertainment. The company was founded by Joey Parsi and Dorsa Foroughi on September 17, 2004 and is headquartered in Los Angeles, CA.