Comparing Nathan’s Famous (NASDAQ:NATH) and Vail Resorts (NYSE:MTN)

Nathan’s Famous (NASDAQ:NATH) and Vail Resorts (NYSE:MTN) are both consumer discretionary companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, risk, profitability, dividends and earnings.

Dividends

Nathan’s Famous pays an annual dividend of $2.00 per share and has a dividend yield of 2.0%. Vail Resorts pays an annual dividend of $8.88 per share and has a dividend yield of 5.9%. Nathan’s Famous pays out 41.2% of its earnings in the form of a dividend. Vail Resorts pays out 201.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Vail Resorts has raised its dividend for 3 consecutive years. Vail Resorts is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Nathan’s Famous and Vail Resorts”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nathan’s Famous	$162.06 million	2.49	$20.02 million	$4.85	20.29
Vail Resorts	$2.96 billion	1.81	$280.00 million	$4.40	34.29

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

Profitability

This table compares Nathan’s Famous and Vail Resorts’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nathan’s Famous	12.35%	-179.01%	34.68%
Vail Resorts	5.38%	21.88%	2.67%

Institutional & Insider Ownership

66.5% of Nathan’s Famous shares are owned by institutional investors. Comparatively, 94.9% of Vail Resorts shares are owned by institutional investors. 30.7% of Nathan’s Famous shares are owned by company insiders. Comparatively, 1.2% of Vail Resorts shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

Nathan’s Famous has a beta of 0.29, indicating that its stock price is 71% less volatile than the S&P 500. Comparatively, Vail Resorts has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nathan’s Famous	0	0	1	0	3.00
Vail Resorts	2	7	5	0	2.21

Vail Resorts has a consensus price target of $151.45, indicating a potential upside of 0.38%. Given Vail Resorts’ higher probable upside, analysts plainly believe Vail Resorts is more favorable than Nathan’s Famous.

Summary

Vail Resorts beats Nathan’s Famous on 10 of the 17 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 Vail Resorts

Vail Resorts, Inc., through its subsidiaries, operates mountain resorts and regional ski areas in the United States. It operates through three segments: Mountain, Lodging, and Real Estate. The Mountain segment operates 41 destination mountain resorts and regional ski areas. This segment is also involved in the ancillary activities, including ski school, dining, and retail/rental operations, as well as real estate brokerage activities. The Lodging segment owns and/or manages various luxury hotels and condominiums under the RockResorts brand; other lodging properties; various condominiums located in proximity to the company's mountain resorts; destination resorts; and golf courses, as well as offers resort ground transportation services. This segment operates owned and managed hotel and condominium units. The Real Estate segment owns, develops, and sells real estate properties. The company was founded in 1845 and is based in Broomfield, Colorado.