Dutch Bros (NYSE:BROS) vs. Ark Restaurants (NASDAQ:ARKR) Critical Analysis

Dutch Bros (NYSE:BROS) and Ark Restaurants (NASDAQ:ARKR) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Institutional & Insider Ownership

85.5% of Dutch Bros shares are owned by institutional investors. Comparatively, 32.0% of Ark Restaurants shares are owned by institutional investors. 38.9% of Dutch Bros shares are owned by insiders. Comparatively, 37.5% of Ark Restaurants shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Dutch Bros and Ark Restaurants, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dutch Bros	0	4	21	1	2.88
Ark Restaurants	1	0	0	0	1.00

Dutch Bros presently has a consensus target price of $71.88, suggesting a potential upside of 89.15%. Given Dutch Bros’ stronger consensus rating and higher possible upside, analysts plainly believe Dutch Bros is more favorable than Ark Restaurants.

Valuation & Earnings

This table compares Dutch Bros and Ark Restaurants”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dutch Bros	$1.64 billion	4.05	$79.84 million	$0.72	52.78
Ark Restaurants	$165.75 million	0.10	-$11.47 million	($0.88)	-5.08

Dutch Bros has higher revenue and earnings than Ark Restaurants. Ark Restaurants is trading at a lower price-to-earnings ratio than Dutch Bros, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Dutch Bros has a beta of 2.31, indicating that its share price is 131% more volatile than the S&P 500. Comparatively, Ark Restaurants has a beta of 0.37, indicating that its share price is 63% less volatile than the S&P 500.

Profitability

This table compares Dutch Bros and Ark Restaurants’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dutch Bros	4.91%	10.01%	2.95%
Ark Restaurants	-2.04%	-10.61%	-2.58%

Summary

Dutch Bros beats Ark Restaurants on 15 of the 15 factors compared between the two stocks.

About Dutch Bros

Dutch Bros Inc., together with its subsidiaries, operates and franchises drive-thru shops in the United States. The company operates through Company-Operated Shops and Franchising and Other segments. It serves through company-operated shops and online channels under Dutch Bros; Dutch Bros Coffee; Dutch Bros Rebel; Dutch Bros; and Blue Rebel brands. Dutch Bros Inc. was founded in 1992 and is headquartered in Grants Pass, Oregon.

About Ark Restaurants

Ark Restaurants Corp., through its subsidiaries, owns and operates restaurants and bars in the United States. It operates restaurants in New York City; Washington, D.C.; Las Vegas, Nevada; Atlantic City, New Jersey; Florida; and Alabama, as well as fast food concepts and catering operations. The company was incorporated in 1983 and is based in New York, New York.