Critical Comparison: Compass Group (OTCMKTS:CMPGY) vs. Denny’s (NASDAQ:DENN)

Denny’s (NASDAQ:DENN) and Compass Group (OTCMKTS:CMPGY) are both retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Denny’s and Compass Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Denny’s	0	6	2	0	2.25
Compass Group	0	0	2	2	3.50

Denny’s currently has a consensus target price of $5.96, suggesting a potential downside of 3.80%. Given Denny’s’ higher probable upside, analysts plainly believe Denny’s is more favorable than Compass Group.

Earnings and Valuation

This table compares Denny’s and Compass Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Denny’s	$452.33 million	0.71	$21.57 million	$0.20	31.00
Compass Group	$46.07 billion	1.18	$1.87 billion	N/A	N/A

Compass Group has higher revenue and earnings than Denny’s.

Insider and Institutional Ownership

85.1% of Denny’s shares are held by institutional investors. Comparatively, 0.0% of Compass Group shares are held by institutional investors. 4.2% of Denny’s shares are held by company insiders. Comparatively, 0.0% of Compass Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Denny’s and Compass Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Denny’s	2.24%	-60.26%	4.19%
Compass Group	N/A	N/A	N/A

Risk & Volatility

Denny’s has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500. Comparatively, Compass Group has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

About Denny’s

Denny’s Corp. engages in the operation of restaurants and franchised, and licensed restaurants. It operates through the Denny’s and Other segments. The Denny’s segment includes the results of all company and franchised and licensed Denny’s restaurants. The Other segment refers to the results of all company and franchise restaurants. The company was founded by Harold Butler and Richard Jezak in 1953 and is headquartered in Spartanburg, SC.

About Compass Group

Compass Group PLC operates as a food and support services company in North America, Europe, and internationally. The company offers support services, such as cleaning in hospitals; reception services at corporate headquarters; managing remote camps; grounds and facilities services at schools and universities; and others. It serves business and industry; healthcare and senior living market; education; sports and leisure; and defense, offshore, and remote sectors. Compass Group PLC was founded in 1941 and is based in Chertsey, the United Kingdom.