Meritage Hospitality Group (OTCMKTS:MHGU) & Sweetgreen (NYSE:SG) Head-To-Head Review

Meritage Hospitality Group (OTCMKTS:MHGU) and Sweetgreen (NYSE:SG) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, dividends and analyst recommendations.

Insider & Institutional Ownership

95.8% of Sweetgreen shares are owned by institutional investors. 67.8% of Meritage Hospitality Group shares are owned by insiders. Comparatively, 19.8% of Sweetgreen shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Meritage Hospitality Group and Sweetgreen’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Meritage Hospitality Group	-6.23%	-25.31%	-3.67%
Sweetgreen	2.49%	-33.07%	-16.37%

Analyst Ratings

This is a breakdown of recent recommendations for Meritage Hospitality Group and Sweetgreen, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Meritage Hospitality Group	0	0	0	0	0.00
Sweetgreen	3	12	4	0	2.05

Sweetgreen has a consensus target price of $7.98, indicating a potential downside of 18.60%. Given Sweetgreen’s stronger consensus rating and higher probable upside, analysts plainly believe Sweetgreen is more favorable than Meritage Hospitality Group.

Risk and Volatility

Meritage Hospitality Group has a beta of -0.07, indicating that its stock price is 107% less volatile than the S&P 500. Comparatively, Sweetgreen has a beta of 2.03, indicating that its stock price is 103% more volatile than the S&P 500.

Valuation and Earnings

This table compares Meritage Hospitality Group and Sweetgreen”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Meritage Hospitality Group	$617.67 million	0.02	-$31.75 million	($5.81)	-0.28
Sweetgreen	$674.69 million	1.73	-$134.07 million	$0.12	81.64

Meritage Hospitality Group has higher earnings, but lower revenue than Sweetgreen. Meritage Hospitality Group is trading at a lower price-to-earnings ratio than Sweetgreen, indicating that it is currently the more affordable of the two stocks.

Summary

Sweetgreen beats Meritage Hospitality Group on 10 of the 14 factors compared between the two stocks.

About Meritage Hospitality Group

Meritage Hospitality Group Inc. operates quick-service and casual dining restaurants. The company operates restaurants under the Wendy's, Morning Belle, and Stan's Tacos, as well as Taco John's brand names in Arkansas, Connecticut, Florida, Georgia, Indiana, Massachusetts, Michigan, Missouri, Mississippi, North Carolina, South Carolina, Ohio, Oklahoma, Tennessee, Texas, and Virginia. It is also involved in franchising activities. The company was formerly known as Thomas Edison Inns, Inc. and changed its name to Meritage Hospitality Group Inc. in May 1996. Meritage Hospitality Group Inc. was incorporated in 1986 and is based in Grand Rapids, Michigan.

About Sweetgreen

Sweetgreen, Inc., together with its subsidiaries, operates fast food restaurants serving healthy foods at scale in the United States. The company also accepts orders through its online and mobile ordering platforms, as well as sells gift cards that do not have an expiration date and can be redeemed. The company was founded in 2006 and is headquartered in Los Angeles, California.