Financial Survey: GreenTree Hospitality Group (NYSE:GHG) vs. First Watch Restaurant Group (NASDAQ:FWRG)

GreenTree Hospitality Group (NYSE:GHG) and First Watch Restaurant Group (NASDAQ:FWRG) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Volatility & Risk

GreenTree Hospitality Group has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, First Watch Restaurant Group has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Earnings & Valuation

This table compares GreenTree Hospitality Group and First Watch Restaurant Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GreenTree Hospitality Group	$1.01 billion	0.10	$23.85 million	$0.05	19.60
First Watch Restaurant Group	$1.22 billion	0.53	$19.43 million	$0.29	36.45

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

Profitability

This table compares GreenTree Hospitality Group and First Watch Restaurant Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GreenTree Hospitality Group	4.14%	2.49%	0.84%
First Watch Restaurant Group	1.35%	2.85%	1.01%

Insider and Institutional Ownership

8.1% of GreenTree Hospitality Group shares are held by institutional investors. Comparatively, 96.1% of First Watch Restaurant Group shares are held by institutional investors. 88.7% of GreenTree Hospitality Group shares are held by insiders. Comparatively, 6.1% of First Watch Restaurant Group 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.

Analyst Ratings

This is a summary of recent recommendations for GreenTree Hospitality Group and First Watch Restaurant Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GreenTree Hospitality Group	1	0	0	0	1.00
First Watch Restaurant Group	0	2	8	1	2.91

First Watch Restaurant Group has a consensus price target of $18.33, indicating a potential upside of 73.45%. Given First Watch Restaurant Group’s stronger consensus rating and higher probable upside, analysts plainly believe First Watch Restaurant Group is more favorable than GreenTree Hospitality Group.

Summary

First Watch Restaurant Group beats GreenTree Hospitality Group on 12 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 First Watch Restaurant Group

First Watch Restaurant Group, Inc., through its subsidiaries, operates and franchises restaurants under the First Watch trade name in the United States. The company was formerly known as AI Fresh Super Holdco, Inc. and changed its name to First Watch Restaurant Group, Inc. in December 2019. First Watch Restaurant Group, Inc. was founded in 1983 and is based in Bradenton, Florida.