Contrasting Arc Group (OTCMKTS:RLLY) & Red Robin Gourmet Burgers (NASDAQ:RRGB)

Red Robin Gourmet Burgers (NASDAQ:RRGB) and Arc Group (OTCMKTS:RLLY) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Red Robin Gourmet Burgers and Arc Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red Robin Gourmet Burgers	1	1	2	0	2.25
Arc Group	0	0	0	0	0.00

Red Robin Gourmet Burgers currently has a consensus target price of $9.50, suggesting a potential upside of 195.03%. Given Red Robin Gourmet Burgers’ stronger consensus rating and higher probable upside, equities analysts clearly believe Red Robin Gourmet Burgers is more favorable than Arc Group.

Earnings & Valuation

This table compares Red Robin Gourmet Burgers and Arc Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red Robin Gourmet Burgers	$1.21 billion	0.05	-$23.28 million	($1.31)	-2.46
Arc Group	N/A	N/A	N/A	N/A	N/A

Arc Group has lower revenue, but higher earnings than Red Robin Gourmet Burgers.

Profitability

This table compares Red Robin Gourmet Burgers and Arc Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red Robin Gourmet Burgers	-1.92%	N/A	-1.96%
Arc Group	N/A	N/A	N/A

Institutional and Insider Ownership

84.0% of Red Robin Gourmet Burgers shares are owned by institutional investors. 2.6% of Red Robin Gourmet Burgers shares are owned by insiders. Comparatively, 12.4% of Arc Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Red Robin Gourmet Burgers beats Arc Group on 5 of the 8 factors compared between the two stocks.

About Red Robin Gourmet Burgers

Red Robin Gourmet Burgers, Inc., together with its subsidiaries, develops, operates, and franchises casual-dining restaurants, in North America and one Canadian province. Its restaurants primarily offer burgers and pizza, appetizers, salads, soups, other entrees, desserts, wings, milkshakes, alcoholic and non-alcoholic specialty drinks, cocktails, wine, and beers. The company was founded in 1969 and is based in Englewood, Colorado.

About Arc Group

ARC Group, Inc. engages in the operation of Dick’s Wings brand of restaurants. It offers its traditional and boneless chicken wings, hog wings, and duck wings spun in its signature sauces and seasonings. The firm oprates through the following segments; Company-Owned Restaurants and Franchise Operations. The Company-Owned Restaurants are casual dining restaurants. The Franchise Operations segment offers franchises for the Dick’s Wings brand. It also offers craft beers under the name Dick’s Craft Beers. The company was founded in April 2000 and is headquartered in Jacksonville, FL.