Financial Survey: Nathan’s Famous (NATH) vs. Its Peers

Nathan’s Famous (NASDAQ:NATH) is one of 382 publicly-traded companies in the “Hotels, Restaurants & Leisure” industry, but how does it contrast to its peers? We will compare Nathan’s Famous to related companies based on the strength of its risk, earnings, profitability, analyst recommendations, dividends, institutional ownership and valuation.

Dividends

Nathan’s Famous pays an annual dividend of $2.00 per share and has a dividend yield of 2.0%. Nathan’s Famous pays out 41.4% of its earnings in the form of a dividend. As a group, “Hotels, Restaurants & Leisure” companies pay a dividend yield of 3.2% and pay out 38.8% of their earnings in the form of a dividend. Nathan’s Famous lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Insider & Institutional Ownership

66.5% of Nathan’s Famous shares are owned by institutional investors. Comparatively, 48.7% of shares of all “Hotels, Restaurants & Leisure” companies are owned by institutional investors. 30.7% of Nathan’s Famous shares are owned by company insiders. Comparatively, 22.1% of shares of all “Hotels, Restaurants & Leisure” companies are owned by company 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 Nathan’s Famous and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nathan’s Famous	11.78%	-187.25%	34.31%
Nathan’s Famous Competitors	8.57%	-41.62%	2.16%

Valuation & Earnings

This table compares Nathan’s Famous and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Nathan’s Famous	$162.06 million	$20.02 million	21.13
Nathan’s Famous Competitors	$3.43 billion	$250.18 million	-158.74

Nathan’s Famous’ peers have higher revenue and earnings than Nathan’s Famous. Nathan’s Famous is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Nathan’s Famous and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nathan’s Famous	0	0	1	0	3.00
Nathan’s Famous Competitors	3819	17310	25634	908	2.50

As a group, “Hotels, Restaurants & Leisure” companies have a potential upside of 58.31%. Given Nathan’s Famous’ peers higher possible upside, analysts plainly believe Nathan’s Famous has less favorable growth aspects than its peers.

Risk & Volatility

Nathan’s Famous has a beta of 0.25, indicating that its share price is 75% less volatile than the S&P 500. Comparatively, Nathan’s Famous’ peers have a beta of 1.68, indicating that their average share price is 68% more volatile than the S&P 500.

Summary

Nathan’s Famous peers beat Nathan’s Famous on 8 of the 15 factors compared.

Nathan’s Famous Company Profile

Nathan’s Famous is a restaurant and branded-food company best known for its hot dogs. Founded by Nathan Handwerker in Coney Island, New York, in 1916, the company has built its brand around the original Coney Island restaurant and its hot dogs. The company operates and franchises restaurants, while also licensing the Nathan’s Famous name for products sold through grocery retailers and foodservice distributors. Its offerings include hot dogs and other prepared foods, along with restaurant items such as fries and burgers.