Nathan’s Famous (NASDAQ:NATH) vs. GreenTree Hospitality Group (NYSE:GHG) Head to Head Contrast

GreenTree Hospitality Group (NYSE:GHG) and Nathan’s Famous (NASDAQ:NATH) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, analyst recommendations, profitability, earnings and risk.

Analyst Ratings

This is a breakdown of current ratings for GreenTree Hospitality Group and Nathan’s Famous, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GreenTree Hospitality Group	1	0	0	0	1.00
Nathan’s Famous	0	0	1	0	3.00

Insider & Institutional Ownership

8.1% of GreenTree Hospitality Group shares are owned by institutional investors. Comparatively, 66.5% of Nathan’s Famous shares are owned by institutional investors. 88.7% of GreenTree Hospitality Group shares are owned by insiders. Comparatively, 30.7% of Nathan’s Famous shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares GreenTree Hospitality Group and Nathan’s Famous’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GreenTree Hospitality Group	N/A	N/A	N/A
Nathan’s Famous	11.78%	-187.25%	34.31%

Volatility and Risk

GreenTree Hospitality Group has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, Nathan’s Famous has a beta of 0.29, indicating that its stock price is 71% less volatile than the S&P 500.

Dividends

GreenTree Hospitality Group pays an annual dividend of $0.05 per share and has a dividend yield of 4.6%. Nathan’s Famous pays an annual dividend of $2.00 per share and has a dividend yield of 2.0%. GreenTree Hospitality Group pays out -62.5% of its earnings in the form of a dividend. Nathan’s Famous pays out 41.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. GreenTree Hospitality Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares GreenTree Hospitality Group and Nathan’s Famous”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GreenTree Hospitality Group	$156.92 million	0.71	$23.85 million	($0.08)	-13.71
Nathan’s Famous	$162.06 million	2.48	$20.02 million	$4.83	20.26

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

Summary

Nathan’s Famous beats GreenTree Hospitality Group on 9 of the 15 factors compared between the two stocks.

About GreenTree Hospitality Group

GreenTree Hospitality Group Ltd., through its subsidiaries, develops leased-and-operated, and franchised-and-managed hotels under the GreenTree Inns brand in the People's Republic of China. It also engages in investment holding activities; and provision of information technology services. The company was founded in 2004 and is headquartered in Shanghai, the People's Republic of China.

About Nathan’s Famous

Nathan’s Famous, Inc. engages in the operation of franchised fast-food units. It is involved in the licensing, wholesaling, and retailing of products marketed under the Nathan’s Famous brand. The firm operates through the following business segments: Branded Product Program, Product Licensing, Restaurant Operations, and Corporate. The Branded Product Program segment markets and sells hot dog products. The Product Licensing segment is composed of royalties from licensing a variety of Nathan’s Famous products such as hotdogs, sausage and corned beef products, frozen French fries, and additional products through retail grocery channels and club stores. The Restaurant Operations segment deals with the sale of products at company-owned restaurants and fees and royalties from franchised restaurants. The Corporate segment includes administrative expenses such as executive management, finance, information technology, legal, insurance, corporate office costs, corporate incentive compensation, and compliance costs. The company was founded by Nathan Handwerker in 1916 and is headquartered in Jericho, NY.