BAB (OTCMKTS:BABB) & Denny’s (NASDAQ:DENN) Head to Head Contrast

BAB (OTCMKTS:BABB) and Denny’s (NASDAQ:DENN) are both small-cap consumer staples companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.

Institutional & Insider Ownership

85.1% of Denny’s shares are held by institutional investors. 33.7% of BAB shares are held by insiders. Comparatively, 4.2% of Denny’s shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares BAB and Denny’s’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BAB	$3.51 million	1.63	$470,000.00	$0.07	11.29
Denny’s	$463.92 million	0.91	$19.94 million	$0.43	18.86

Denny’s has higher revenue and earnings than BAB. BAB is trading at a lower price-to-earnings ratio than Denny’s, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

BAB has a beta of 0.08, meaning that its share price is 92% less volatile than the S&P 500. Comparatively, Denny’s has a beta of 1.94, meaning that its share price is 94% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for BAB and Denny’s, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BAB	0	0	0	0	N/A
Denny’s	0	3	3	0	2.50

Denny’s has a consensus price target of $11.42, suggesting a potential upside of 40.77%. Given Denny’s’ higher possible upside, analysts plainly believe Denny’s is more favorable than BAB.

Profitability

This table compares BAB and Denny’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BAB	14.78%	17.10%	12.09%
Denny’s	5.27%	-63.27%	6.66%

Summary

Denny’s beats BAB on 8 of the 13 factors compared between the two stocks.

About BAB

BAB, Inc. franchises and licenses bagel and muffin retail units under the Big Apple Bagels (BAB), My Favorite Muffin (MFM), and SweetDuet (SD) trade names in the United States. It's BAB franchised brand includes daily baked bagels, flavored cream cheeses, premium coffees, gourmet bagel sandwiches, and other related products; and MFM brand comprises various freshly baked muffins and coffees, as well as units operating as My Favorite Muffin Your All Day Bakery Café features specialty bagel sandwiches and related products. The company's SD brand includes frozen yogurt products. BAB, Inc. was founded in 1993 and is based in Deerfield, Illinois.

About Denny’s

Denny's Corporation, through its subsidiaries, owns and operates franchised full-service restaurant chains under the Denny's and Keke's Breakfast Cafe brands in the United States and internationally. The company was formerly known as Advantica Restaurant Group, Inc. and changed its name to Denny's Corporation in July 2002. Denny's Corporation was founded in 1953 and is headquartered in Spartanburg, South Carolina.