RCI Hospitality (NASDAQ:RICK – Get Free Report) and Lucky Strike Entertainment (NYSE:LUCK – Get Free Report) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, valuation and earnings.
Insider and Institutional Ownership
53.8% of RCI Hospitality shares are owned by institutional investors. Comparatively, 68.1% of Lucky Strike Entertainment shares are owned by institutional investors. 9.6% of RCI Hospitality shares are owned by company insiders. Comparatively, 84.2% of Lucky Strike Entertainment shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Dividends
RCI Hospitality pays an annual dividend of $0.32 per share and has a dividend yield of 1.4%. Lucky Strike Entertainment pays an annual dividend of $0.24 per share and has a dividend yield of 2.8%. RCI Hospitality pays out 26.7% of its earnings in the form of a dividend. Lucky Strike Entertainment pays out -36.9% 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. RCI Hospitality has raised its dividend for 4 consecutive years. Lucky Strike Entertainment is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| RCI Hospitality | 3.87% | 4.05% | 1.82% |
| Lucky Strike Entertainment | -7.09% | N/A | -2.74% |
Earnings & Valuation
This table compares RCI Hospitality and Lucky Strike Entertainment”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| RCI Hospitality | $279.43 million | 0.63 | $10.81 million | $1.20 | 18.95 |
| Lucky Strike Entertainment | $1.20 billion | 0.97 | -$10.02 million | ($0.65) | -13.07 |
RCI Hospitality has higher earnings, but lower revenue than Lucky Strike Entertainment. Lucky Strike Entertainment is trading at a lower price-to-earnings ratio than RCI Hospitality, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current recommendations for RCI Hospitality and Lucky Strike Entertainment, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| RCI Hospitality | 1 | 0 | 1 | 0 | 2.00 |
| Lucky Strike Entertainment | 1 | 4 | 4 | 0 | 2.33 |
RCI Hospitality presently has a consensus price target of $98.00, indicating a potential upside of 330.96%. Lucky Strike Entertainment has a consensus price target of $11.64, indicating a potential upside of 37.09%. Given RCI Hospitality’s higher possible upside, analysts clearly believe RCI Hospitality is more favorable than Lucky Strike Entertainment.
Risk and Volatility
RCI Hospitality has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, Lucky Strike Entertainment has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.
Summary
RCI Hospitality beats Lucky Strike Entertainment on 9 of the 17 factors compared between the two stocks.
About RCI Hospitality
RCI Hospitality Holdings, Inc., through its subsidiaries, engages in the hospitality and related businesses in the United States. It operates in Nightclubs, Bombshells, and Media Group segments. The company’s wholly-owned subsidiaries own and/or operates upscale adult nightclubs serving primarily businessmen and professionals under the Rick's Cabaret, Jaguars Club, Tootsie's Cabaret, XTC Cabaret, Club Onyx, Hoops Cabaret and Sports Bar, Scarlett's Cabaret, Temptations Adult Cabaret, Foxy's Cabaret, Vivid Cabaret, Downtown Cabaret, Cabaret East, The Seville, Silver City Cabaret, and Kappa Men's Club. Wholly-owned subsidiaries also operate restaurants and sports bars under the Bombshells Restaurant & Bar brand; and dance clubs under the Studio 80 brand. As of February 11, 2019, the company operated 46 units, including 39 nightclub units and 7 Bombshell units. In addition, it owns two national industry trade publications serving the adult nightclubs industry and the adult retail products industry; a national industry convention and tradeshow; and two national industry award shows, as well as approximately a dozen industry and social media Websites. The company founded in 1983 as Rick's Cabaret International, Inc., changed its name to RCI Hospitality Holdings, Inc. in August 2014, and is based in Houston, Texas.
About Lucky Strike Entertainment
Lucky Strike Entertainment Corp. engages in operating bowling centers. It offers entertainment concepts with lounge seating, arcades, food and beverage offerings, and hosting and overseeing professional and non-professional bowling tournaments and related broadcasting. The company was founded by Thomas F. Shannon in 1997 and is headquartered in Mechanicsville, VA.
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