Analyzing BAB (OTCMKTS:BABB) & GEN Restaurant Group (NASDAQ:GENK)

BAB (OTCMKTS:BABB) and GEN Restaurant Group (NASDAQ:GENK) are both small-cap consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Earnings and Valuation

This table compares BAB and GEN Restaurant Group’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BAB	$3.51 million	1.65	$470,000.00	$0.07	11.43
GEN Restaurant Group	$195.29 million	1.35	$8.41 million	$0.18	45.11

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

Analyst Recommendations

This is a breakdown of recent ratings for BAB and GEN Restaurant Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BAB	0	0	0	0	N/A
GEN Restaurant Group	0	0	3	0	3.00

GEN Restaurant Group has a consensus target price of $13.17, indicating a potential upside of 62.15%. Given GEN Restaurant Group’s higher possible upside, analysts plainly believe GEN Restaurant Group is more favorable than BAB.

Insider & Institutional Ownership

10.2% of GEN Restaurant Group shares are held by institutional investors. 33.7% of BAB shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

BAB has a beta of 0.07, meaning that its stock price is 93% less volatile than the S&P 500. Comparatively, GEN Restaurant Group has a beta of 2.3, meaning that its stock price is 130% more volatile than the S&P 500.

Profitability

This table compares BAB and GEN Restaurant Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BAB	15.23%	17.45%	12.20%
GEN Restaurant Group	0.56%	2.76%	0.55%

Summary

GEN Restaurant Group 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 GEN Restaurant Group

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