Dave & Buster’s Entertainment (NASDAQ:PLAY) and Luby’s (NYSE:LUB) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, profitability, institutional ownership, dividends, valuation and risk.
Risk & Volatility
Dave & Buster’s Entertainment has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, Luby’s has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500.
Dave & Buster’s Entertainment pays an annual dividend of $0.60 per share and has a dividend yield of 1.4%. Luby’s does not pay a dividend. Dave & Buster’s Entertainment pays out 20.5% of its earnings in the form of a dividend.
This is a breakdown of recent ratings for Dave & Buster’s Entertainment and Luby’s, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Dave & Buster’s Entertainment||0||8||4||0||2.33|
Dave & Buster’s Entertainment presently has a consensus price target of $48.79, suggesting a potential upside of 17.00%. Given Dave & Buster’s Entertainment’s higher possible upside, research analysts plainly believe Dave & Buster’s Entertainment is more favorable than Luby’s.
Valuation and Earnings
This table compares Dave & Buster’s Entertainment and Luby’s’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Dave & Buster’s Entertainment||$1.27 billion||1.20||$117.22 million||$2.93||14.23|
|Luby’s||$365.20 million||0.16||-$33.56 million||N/A||N/A|
Dave & Buster’s Entertainment has higher revenue and earnings than Luby’s.
This table compares Dave & Buster’s Entertainment and Luby’s’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Dave & Buster’s Entertainment||9.06%||29.12%||7.87%|
Institutional & Insider Ownership
32.6% of Luby’s shares are held by institutional investors. 3.7% of Dave & Buster’s Entertainment shares are held by insiders. Comparatively, 37.8% of Luby’s shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Dave & Buster’s Entertainment beats Luby’s on 10 of the 13 factors compared between the two stocks.
Dave & Buster’s Entertainment Company Profile
Dave & Buster's Entertainment, Inc. owns and operates entertainment and dining venues for adults and families. Its venues offer a menu of entrÃ©es and appetizers, as well as a selection of non-alcoholic and alcoholic beverages; and an assortment of entertainment attractions centered on playing games and watching live sports, and other televised events. The company operates its venues under the Dave & Buster's name. As of April 02, 2019, it owned and operated 125 venues in 39 states, Puerto Rico, and Canada. The company was founded in 1982 and is headquartered in Dallas, Texas.
Luby’s Company Profile
Luby's, Inc. provides restaurant services in the United States. It operates through three segments: Company-owned Restaurants, Franchise Operations, and Culinary Contract Services. The company operates casual dining restaurants; and offers culinary contract services, including contract arrangements to manage food services for healthcare clients, corporate dining clients, government buildings, and sports stadiums, as well as through retail grocery stores. Its primary brands include Luby's Cafeteria, Fuddruckers – World's Greatest Hamburgers, and Cheeseburger in Paradise, as well as Luby's Culinary Contract Services. As of August 29, 2018, the company operated 146 restaurants; and 28 locations through Culinary Contract Services, as well as franchised 105 Fuddruckers restaurants. The company was formerly known as Luby's Cafeterias, Inc. Luby's, Inc. was founded in 1947 and is headquartered in Houston, Texas.
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