Critical Contrast: Nathan’s Famous (NASDAQ:NATH) versus Dutch Bros (NYSE:BROS)

Nathan’s Famous (NASDAQ:NATH) and Dutch Bros (NYSE:BROS) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitability, analyst recommendations and dividends.

Earnings & Valuation

This table compares Nathan’s Famous and Dutch Bros”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nathan’s Famous	$148.18 million	2.79	$24.03 million	$5.20	19.45
Dutch Bros	$1.64 billion	5.76	$79.84 million	$0.64	89.54

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

Institutional and Insider Ownership

66.5% of Nathan’s Famous shares are held by institutional investors. Comparatively, 85.5% of Dutch Bros shares are held by institutional investors. 30.7% of Nathan’s Famous shares are held by company insiders. Comparatively, 38.9% of Dutch Bros shares are held 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 Dutch Bros’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nathan’s Famous	13.59%	-182.42%	37.18%
Dutch Bros	4.87%	9.56%	2.82%

Analyst Ratings

This is a summary of current ratings for Nathan’s Famous and Dutch Bros, 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
Dutch Bros	0	3	21	1	2.92

Dutch Bros has a consensus target price of $75.65, indicating a potential upside of 32.01%. Given Dutch Bros’ higher possible upside, analysts clearly believe Dutch Bros is more favorable than Nathan’s Famous.

Risk & Volatility

Nathan’s Famous has a beta of 0.32, suggesting that its stock price is 68% less volatile than the S&P 500. Comparatively, Dutch Bros has a beta of 2.5, suggesting that its stock price is 150% more volatile than the S&P 500.

Summary

Dutch Bros beats Nathan’s Famous on 11 of the 15 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 Dutch Bros

Dutch Bros Inc., together with its subsidiaries, operates and franchises drive-thru shops in the United States. The company operates through Company-Operated Shops and Franchising and Other segments. It serves through company-operated shops and online channels under Dutch Bros; Dutch Bros Coffee; Dutch Bros Rebel; Dutch Bros; and Blue Rebel brands. Dutch Bros Inc. was founded in 1992 and is headquartered in Grants Pass, Oregon.