Head to Head Review: Ark Restaurants (NASDAQ:ARKR) & Nathan’s Famous (NASDAQ:NATH)

Ark Restaurants (NASDAQ:ARKR) and Nathan’s Famous (NASDAQ:NATH) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, valuation and dividends.

Earnings & Valuation

This table compares Ark Restaurants 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
Ark Restaurants	$165.75 million	0.10	-$11.47 million	($0.88)	-5.34
Nathan’s Famous	$162.06 million	2.58	$20.02 million	$4.83	21.13

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

Insider and Institutional Ownership

32.0% of Ark Restaurants shares are owned by institutional investors. Comparatively, 66.5% of Nathan’s Famous shares are owned by institutional investors. 37.5% of Ark Restaurants shares are owned by insiders. Comparatively, 30.7% of Nathan’s Famous shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ark Restaurants	-2.04%	-10.61%	-2.58%
Nathan’s Famous	11.78%	-187.25%	34.31%

Analyst Ratings

This is a summary of current recommendations and price targets for Ark Restaurants and Nathan’s Famous, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ark Restaurants	1	0	0	0	1.00
Nathan’s Famous	0	0	1	0	3.00

Volatility & Risk

Ark Restaurants has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500. Comparatively, Nathan’s Famous has a beta of 0.25, suggesting that its stock price is 75% less volatile than the S&P 500.

Summary

Nathan’s Famous beats Ark Restaurants on 8 of the 12 factors compared between the two stocks.

About Ark Restaurants

Ark Restaurants Corp., through its subsidiaries, owns and operates restaurants and bars in the United States. It operates restaurants in New York City; Washington, D.C.; Las Vegas, Nevada; Atlantic City, New Jersey; Florida; and Alabama, as well as fast food concepts and catering operations. The company was incorporated in 1983 and is based in New York, New York.

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.