Dave & Buster’s Entertainment (NASDAQ: PLAY) and RCI Hospitality Holdings (NASDAQ:RICK) are both retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, risk and valuation.
Risk and Volatility
Dave & Buster’s Entertainment has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500. Comparatively, RCI Hospitality Holdings has a beta of 0.25, indicating that its share price is 75% less volatile than the S&P 500.
Institutional and Insider Ownership
40.3% of RCI Hospitality Holdings shares are held by institutional investors. 5.6% of Dave & Buster’s Entertainment shares are held by company insiders. Comparatively, 6.9% of RCI Hospitality Holdings shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
RCI Hospitality Holdings pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. Dave & Buster’s Entertainment does not pay a dividend. RCI Hospitality Holdings pays out 10.6% of its earnings in the form of a dividend.
This is a summary of recent recommendations for Dave & Buster’s Entertainment and RCI Hospitality Holdings, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Dave & Buster’s Entertainment||0||0||9||0||3.00|
|RCI Hospitality Holdings||0||0||2||0||3.00|
Dave & Buster’s Entertainment currently has a consensus price target of $77.50, indicating a potential upside of 29.15%. RCI Hospitality Holdings has a consensus price target of $28.50, indicating a potential upside of 12.96%. Given Dave & Buster’s Entertainment’s higher possible upside, equities research analysts clearly believe Dave & Buster’s Entertainment is more favorable than RCI Hospitality Holdings.
This table compares Dave & Buster’s Entertainment and RCI Hospitality Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Dave & Buster’s Entertainment||9.78%||22.71%||9.34%|
|RCI Hospitality Holdings||7.84%||10.75%||5.08%|
Valuation & Earnings
This table compares Dave & Buster’s Entertainment and RCI Hospitality Holdings’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Dave & Buster’s Entertainment||$1.05 billion||2.37||$254.99 million||$2.36||25.43|
|RCI Hospitality Holdings||$138.72 million||1.77||$34.45 million||$1.13||22.33|
Dave & Buster’s Entertainment has higher revenue and earnings than RCI Hospitality Holdings. RCI Hospitality Holdings is trading at a lower price-to-earnings ratio than Dave & Buster’s Entertainment, indicating that it is currently the more affordable of the two stocks.
Dave & Buster’s Entertainment beats RCI Hospitality Holdings on 12 of the 15 factors compared between the two stocks.
RCI Hospitality Holdings Company Profile
With more than 40 units, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in gentlemen’s clubs and sports bars/restaurants. Clubs in New York City, Miami, Philadelphia, Charlotte, Dallas/Ft. Worth, Houston, Minneapolis, and other cities operate under brand names, such as “Rick’s Cabaret,” “XTC,” “Club Onyx,” “Vivid Cabaret,” “Jaguars” and “Tootsie’s Cabaret.” Sports bars/restaurants operate under the brand name “Bombshells Restaurant & Bar.” Investors are attracted by RCI’s strong cash flow, operating margins and local laws that create high barriers to entry in the gentlemen’s club business.
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