Comparison of Meritage Hospitality Group (OTCMKTS:MHGU) and GEN Restaurant Group (NASDAQ:GENK)

GEN Restaurant Group (NASDAQ:GENK – Get Free Report) and Meritage Hospitality Group (OTCMKTS:MHGU – Get Free Report) are both small-cap retail/wholesale companies, but which is the better business? We’ll compare the two companies based on the strength of their analyst recommendations, dividends, risk, institutional ownership, profitability, valuation, and earnings.

Analyst Recommendations

This is an overview of the current recommendations and price targets for GEN Restaurant Group and Meritage Hospitality Group, as reported by MarketBeat.

	Sales Reviews	Keep track of reviews	Buy reviews	Strong Buyer Reviews	Rating score
GEN Restaurant Group	0	0	3	0	3.00
Meritage Hospitality Group	0	0	1	0	3.00

GEN Restaurant Group currently has a consensus price target of $13.83, suggesting a potential upside of 65.87%. Meritage Hospitality Group has a consensus price target of $24.00, suggesting a potential upside of 34.08%. Given the higher potential upside of GEN Restaurant Group, research analysts clearly believe GEN Restaurant Group is more favorable than Meritage Hospitality Group.

Profitability

This table compares the net margins, return on equity and return on assets of GEN Restaurant Group and Meritage Hospitality Group.

	Net margins	Return on equity	Return on assets
GEN Restaurant Group	0.44%	2.32%	0.43%
Meritage Hospitality Group	1.31%	7.22%	1.08%

Institutional and insider ownership

10.2% of GEN Restaurant Group shares are held by institutional investors. 67.8% of Meritage Hospitality Group shares are held by insiders. Strong institutional ownership is an indication that large asset managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and profit

This table compares the revenue, earnings per share (EPS) and valuation of GEN Restaurant Group and Meritage Hospitality Group.

	Gross income	Price/Sales Ratio	Net income	Profit per share	Price/Earnings Ratio
GEN Restaurant Group	$181.01 million	1.49	$8.41 million	$0.18	46.33
Meritage Hospitality Group	$672.49 million	0.18	$6.14 million	$0.81	22.10

GEN Restaurant Group has higher profits but lower revenues than Meritage Hospitality Group. Meritage Hospitality Group trades at a lower price-to-earnings ratio than GEN Restaurant Group, indicating that it is currently the more affordable of the two stocks.

About GEN Restaurant Group

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GEN Restaurant Group, Inc. operates restaurants in California, Arizona, Hawaii, Nevada, Texas, New York and Florida. It offers meat, poultry and seafood. The company was founded in 2011 and is based in Cerritos, California.

About Meritage Hospitality Group

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Meritage Hospitality Group Inc. operates fast food and casual dining restaurants. The company operates restaurants under the Wendy’s, Morning Belle and Stan’s Tacos brand names, as well as Taco John’s in Arkansas, Connecticut, Florida, Georgia, Indiana, Massachusetts, Michigan, Missouri, Mississippi, North Carolina, South Carolina, Ohio, Oklahoma, Tennessee, Texas and Virginia. It is also involved in franchising activities. The company was formerly known as Thomas Edison Inns, Inc. and changed its name to Meritage Hospitality Group Inc. in May 1996. Meritage Hospitality Group Inc. was founded in 1986 and is based in Grand Rapids, Michigan.

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