FAT Brands (NASDAQ:FATBB – Get Rating) and ONE Group Hospitality (NASDAQ:STKS – Get Rating) are both small-cap retail/wholesale companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitability and analyst recommendations.
Insider & Institutional Ownership
0.6% of FAT Brands shares are held by institutional investors. Comparatively, 39.7% of ONE Group Hospitality shares are held by institutional investors. 19.3% of ONE Group Hospitality shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
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Earnings & Valuation
This table compares FAT Brands and ONE Group Hospitality's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
| FAT Brands | $118.88 million | 1.07 | -$31.58 million | ($3.59) | -2.17 |
| ONE Group Hospitality | $277.18 million | 0.81 | $31.35 million | $0.75 | 9.12 |
ONE Group Hospitality has higher revenue and earnings than FAT Brands. FAT Brands is trading at a lower price-to-earnings ratio than ONE Group Hospitality, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares FAT Brands and ONE Group Hospitality's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
| FAT Brands | -18.14% | N/A | -3.67% |
| ONE Group Hospitality | 8.17% | 35.49% | 9.56% |
Analyst Recommendations
This is a summary of current ratings and recommmendations for FAT Brands and ONE Group Hospitality, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
| FAT Brands | 0 | 0 | 0 | 0 | N/A |
| ONE Group Hospitality | 0 | 0 | 3 | 0 | 3.00 |
ONE Group Hospitality has a consensus target price of $16.00, suggesting a potential upside of 133.92%. Given ONE Group Hospitality's higher possible upside, analysts clearly believe ONE Group Hospitality is more favorable than FAT Brands.
Summary
ONE Group Hospitality beats FAT Brands on 11 of the 12 factors compared between the two stocks.
About FAT Brands
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FAT Brands Inc., a multi-brand franchising company, acquires, develops, and manages quick service, fast casual, casual dining, and polished casual dining restaurant concepts worldwide. As of August 22, 2022, it owned seventeen restaurant brands, including Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli's, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo's Cafe and Buffalo's Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean, and Ponderosa Steakhouse/Bonanza Steakhouse, as well as franchises and owns approximately 2,300 locations. The company was incorporated in 2017 and is headquartered in Beverly Hills, California. FAT Brands Inc. operates as a subsidiary of Fog Cutter Holdings, LLC.
About ONE Group Hospitality
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The ONE Group Hospitality, Inc., a hospitality company, develops, owns, operates, manages, and licenses restaurants and lounges worldwide. It operates through STK, Kona Grill, and ONE Hospitality segments. The company also provides turn-key food and beverage services for hospitality venues, including hotels, casinos, and other locations. Its hospitality food and beverage solutions include developing, managing, and operating restaurants, bars, rooftops, pools, banqueting, catering, private dining rooms, room service, and mini bars; and offers hospitality advisory and consulting services. The company operates restaurants primarily under the STK and Kona Grill brands. As of December 31, 2021, it owned, operated, managed, or licensed 60 venues, including 23 STKs and 24 Kona Grills in North America, Europe, and the Middle East, as well as 13 F&B venues in seven hotels and casinos in the United States and Europe. The ONE Group Hospitality, Inc. was founded in 2004 and is headquartered in Denver, Colorado.
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