BAB (OTCMKTS:BABB – Get Rating) and Dine Brands Global (NYSE:DIN – Get Rating) are both small-cap consumer staples companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.
BAB pays an annual dividend of $0.04 per share and has a dividend yield of 4.3%. Dine Brands Global pays an annual dividend of $2.04 per share and has a dividend yield of 2.8%. BAB pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dine Brands Global pays out 38.0% of its earnings in the form of a dividend. Dine Brands Global has raised its dividend for 1 consecutive years.
Institutional & Insider Ownership
91.5% of Dine Brands Global shares are held by institutional investors. 33.7% of BAB shares are held by company insiders. Comparatively, 3.4% of Dine Brands Global shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares BAB and Dine Brands Global’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Dine Brands Global||9.90%||-38.58%||5.37%|
This is a summary of current recommendations and price targets for BAB and Dine Brands Global, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Dine Brands Global||0||1||7||0||2.88|
Dine Brands Global has a consensus target price of $93.00, suggesting a potential upside of 27.19%. Given Dine Brands Global’s higher possible upside, analysts clearly believe Dine Brands Global is more favorable than BAB.
Volatility & Risk
BAB has a beta of 0.08, indicating that its share price is 92% less volatile than the S&P 500. Comparatively, Dine Brands Global has a beta of 1.82, indicating that its share price is 82% more volatile than the S&P 500.
Earnings and Valuation
This table compares BAB and Dine Brands Global’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Dine Brands Global||$896.17 million||1.28||$97.86 million||$5.37||13.62|
Dine Brands Global has higher revenue and earnings than BAB. Dine Brands Global is trading at a lower price-to-earnings ratio than BAB, indicating that it is currently the more affordable of the two stocks.
Dine Brands Global beats BAB on 9 of the 16 factors compared between the two stocks.
BAB, Inc. franchises and licenses bagel and muffin retail units under the Big Apple Bagels (BAB), My Favorite Muffin (MFM), and SweetDuet (SD) trade names in the United States. It’s BAB franchised brand consists of daily baked bagels, flavored cream cheeses, premium coffees, gourmet bagel sandwiches, and other related products. The company’s MFM brand comprise of various freshly baked muffins and coffees; and units operating as My Favorite Muffin Your All Day Bakery Café featuring specialty bagel sandwiches and related products. Its SD brand includes frozen yogurt products. As of November 30, 2021, the company had 68 franchise units and 4 licensed units in operation in 20 states. BAB, Inc. was incorporated in 2000 and is based in Deerfield, Illinois.
About Dine Brands Global
Dine Brands Global, Inc., together with its subsidiaries, owns, franchises, operates, and rents full-service restaurants in the United States and internationally. It operates through five segments: Applebee’s Franchise Operations, International House of Pancakes (IHOP) Franchise Operations, Rental Operations, Financing Operations, and Company-Operated Restaurant Operations. The company owns and franchises two restaurant concepts, including Applebee’s Neighborhood Grill + Bar in the bar and grill segment of the casual dining category; and IHOP in the family dining category of the restaurant industry. Its Applebee’s restaurants offer American fare with drinks and drafts; and IHOP restaurants provide full table services, and food and beverage offerings. As of December 31, 2021, the company had 1,611 Applebee’s franchised restaurants, and 1,751 IHOP franchised and area licensed restaurants. It is also involved in the lease or sublease of 598 IHOP franchised restaurants and two Applebee’s franchised restaurants; and the financing of franchise fees and equipment leases. the company was formerly known as DineEquity, Inc. and changed its name to Dine Brands Global, Inc. in February 2018. Dine Brands Global, Inc. was founded in 1958 and is headquartered in Glendale, California.
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