Del Taco Restaurants ( NASDAQ:TACO) and Diversified Restaurant ( NASDAQ:SAUC) are both small-cap retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, profitability and earnings.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Del Taco Restaurants and Diversified Restaurant, as provided by MarketBeat.com.

Del Taco Restaurants presently has a consensus price target of $14.67, suggesting a potential upside of 46.67%. Given Del Taco Restaurants’ higher possible upside, equities research analysts clearly believe Del Taco Restaurants is more favorable than Diversified Restaurant.

Valuation & Earnings

This table compares Del Taco Restaurants and Diversified Restaurant’s gross revenue, earnings per share (EPS) and valuation.

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

Institutional & Insider Ownership

82.0% of Del Taco Restaurants shares are held by institutional investors. Comparatively, 53.1% of Diversified Restaurant shares are held by institutional investors. 14.6% of Del Taco Restaurants shares are held by insiders. Comparatively, 50.0% of Diversified Restaurant shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Del Taco Restaurants and Diversified Restaurant’s net margins, return on equity and return on assets.

Volatility and Risk

Del Taco Restaurants has a beta of 0.2, meaning that its share price is 80% less volatile than the S&P 500. Comparatively, Diversified Restaurant has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500.

Summary

Del Taco Restaurants beats Diversified Restaurant on 11 of the 13 factors compared between the two stocks.

Del Taco Restaurants Company Profile

Del Taco Restaurants, Inc. develops, franchises, owns, and operates Del Taco quick-service Mexican-American restaurants in the United States. The company’s restaurants offer Mexican inspired and American classic dishes. As of December 10, 2018, it operated approximately 560 restaurants across 14 states. The company was founded in 1964 and is headquartered in Lake Forest, California.

Diversified Restaurant Company Profile

Diversified Restaurant Holdings, Inc., a restaurant company, operates Buffalo Wild Wings franchised restaurants in the United States. The company primarily offers fresh bone-in chicken wings, frozen boneless chicken, and potatoes. As of March 8, 2018, it operated 65 franchised restaurants in Florida, Illinois, Indiana, Michigan, and Missouri. The company was founded in 1999 and is headquartered in Southfield, Michigan.

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Diversified Restaurant (NASDAQ:SAUC) & Del Taco Restaurants (TACO) Head-To-Head Contrast

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