Head-To-Head Comparison: FAT Brands (NASDAQ:FATBB) & Nathan’s Famous (NASDAQ:NATH)

Nathan’s Famous (NASDAQ:NATHGet Rating) and FAT Brands (NASDAQ:FATBBGet Rating) are both small-cap retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, dividends, profitability, valuation, analyst recommendations and institutional ownership.

Analyst Ratings

This is a summary of current recommendations for Nathan’s Famous and FAT Brands, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nathan’s Famous 0 0 0 0 N/A
FAT Brands 0 0 0 0 N/A

Dividends

Nathan’s Famous pays an annual dividend of $1.80 per share and has a dividend yield of 2.6%. FAT Brands pays an annual dividend of $0.56 per share and has a dividend yield of 7.0%. Nathan’s Famous pays out 49.5% of its earnings in the form of a dividend. FAT Brands pays out -15.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Nathan’s Famous has raised its dividend for 1 consecutive years. FAT Brands is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

38.0% of Nathan’s Famous shares are owned by institutional investors. Comparatively, 0.6% of FAT Brands shares are owned by institutional investors. 31.7% of Nathan’s Famous shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Nathan’s Famous 12.14% -27.59% 15.24%
FAT Brands -18.14% N/A -3.67%

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nathan’s Famous $114.88 million 2.42 $13.60 million $3.64 18.71
FAT Brands $118.88 million 1.09 -$31.58 million ($3.59) -2.22

Nathan’s Famous has higher earnings, but lower revenue than FAT Brands. FAT Brands 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.

Summary

Nathan’s Famous beats FAT Brands on 9 of the 13 factors compared between the two stocks.

About Nathan’s Famous

(Get Rating)

Nathan's Famous, Inc., together with its subsidiaries, operates in the foodservice industry. The company owns and franchises restaurants under the Nathan's Famous brand name, as well as sells products bearing the Nathan's Famous trademarks through various channels of distribution. It also has license agreements for the manufacture, distribution, marketing, and sale of Nathan's Famous branded hot dogs, sausages, and corned beef products in refrigerated consumer packages to be resold through retail channels, such as supermarkets, groceries, mass merchandisers, and club stores; and other Nathan's Famous branded refrigerated meat products in consumer packages to be resold through retail channels. In addition, the company has license agreements to manufacture Nathan's Famous branded hot dog and sausage products in bulk for use in the food service industry; for supplying Nathan's Famous natural casing and skinless hot dogs in bulk for use in the Nathan's Famous restaurant system; to manufacture proprietary spices; to produce and distribute sauerkraut and pickles; to produce and sell French fries and onion rings for retail sale; and to produce and sell miniature bagel dogs, franks-in-a-blanket, mozzarella sticks, and other hors d'oeuvres through club stores, supermarkets, and other retail food stores. Further, the company sells Nathan's products directly to foodservice operators or to various foodservice distributors, as well as provides Arthur Treacher's brand fish fillets. As of March 27, 2022, its restaurant system consisted of four company-owned units in the New York City metropolitan area; and 239 franchised units in 18 states and 12 foreign countries. Nathan's Famous, Inc. was founded in 1916 and is based in Jericho, New York.

About FAT Brands

(Get Rating)

FAT Brands Inc., a multi-brand franchising company, acquires, develops, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts worldwide. As of April 18, 2022, it owned seventeen restaurant brands, including Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli's, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo's Cafe and Buffalo's Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean, and Ponderosa Steakhouse/Bonanza Steakhouse, as well as 2,300 franchised locations. The company was incorporated in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. operates as a subsidiary of Fog Cutter Holdings, LLC.

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