Financial Analysis: RCI Hospitality Holdings (RICK) vs. Dave & Buster’s Entertainment (NASDAQ:PLAY)

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.

Dividends

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.

Analyst Ratings

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.

Profitability

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.

Summary

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.

Receive News & Ratings for Dave & Buster's Entertainment Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Dave & Buster's Entertainment Inc. and related companies with our FREE daily email newsletter.

 

Latest News



Leave a Reply

 
© 2006-2017 Rincon Hill News.