Sweetgreen (NYSE:SG – Get Rating) and Denny's (NASDAQ:DENN – Get Rating) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, profitability, earnings, institutional ownership and risk.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Sweetgreen and Denny's, as reported by MarketBeat.
Get Sweetgreen alerts:| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Sweetgreen | 0 | 0 | 0 | 0 | N/A |
| Denny's | 0 | 2 | 2 | 0 | 2.50 |
Sweetgreen presently has a consensus price target of 19.00, indicating a potential upside of 87.93%. Denny's has a consensus price target of $12.40, indicating a potential upside of 21.69%. Given Sweetgreen's higher probable upside, equities research analysts clearly believe Sweetgreen is more favorable than Denny's.
Profitability
This table compares Sweetgreen and Denny's' net margins, return on equity and return on assets.| Net Margins | Return on Equity | Return on Assets | |
| Sweetgreen | -45.27% | -30.98% | -26.19% |
| Denny's | 23.78% | -58.33% | 7.31% |
Institutional & Insider Ownership
70.1% of Sweetgreen shares are held by institutional investors. Comparatively, 84.6% of Denny's shares are held by institutional investors. 27.5% of Sweetgreen shares are held by insiders. Comparatively, 5.5% of Denny's shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares Sweetgreen and Denny's' top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Sweetgreen | $339.87 million | 3.30 | -$153.18 million | -2.38 | -4.25 |
| Denny's | $398.17 million | 1.46 | $78.07 million | $1.67 | 6.10 |
Denny's has higher revenue and earnings than Sweetgreen. Sweetgreen is trading at a lower price-to-earnings ratio than Denny's, indicating that it is currently the more affordable of the two stocks.
Summary
Denny's beats Sweetgreen on 8 of the 12 factors compared between the two stocks.
About Sweetgreen
(Get Rating)
Sweetgreen, Inc., together with its subsidiaries, develops and operates fast-casual restaurants serving healthy foods prepared from seasonal and organic ingredients. The company also accepts orders through its online and mobile ordering platforms, as well as sells gift cards that can be redeemed in its restaurants. As of September 26, 2021, it owned and operated 140 restaurants in 13 states and Washington, D.C. The company was founded in 2006 and is headquartered in Los Angeles, California.
About Denny's
(Get Rating)
Denny's Corporation, through its subsidiary, Denny's, Inc., owns and operates full-service restaurant chains under the Denny's brand. As of December 29, 2021, it had 1,640 franchised, licensed, and company restaurants worldwide. The company was formerly known as Advantica Restaurant Group, Inc. and changed its name to Denny's Corporation in 2002. Denny's Corporation was founded in 1953 and is based in Spartanburg, South Carolina.
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