Contrasting GreenTree Hospitality Group (NYSE:GHG) and First Watch Restaurant Group (NASDAQ:FWRG)

First Watch Restaurant Group (NASDAQ:FWRG) and GreenTree Hospitality Group (NYSE:GHG) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Profitability

This table compares First Watch Restaurant Group and GreenTree Hospitality Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Watch Restaurant Group	1.35%	2.85%	1.01%
GreenTree Hospitality Group	4.14%	2.49%	0.84%

Volatility & Risk

First Watch Restaurant Group has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, GreenTree Hospitality Group has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.

Insider & Institutional Ownership

96.1% of First Watch Restaurant Group shares are owned by institutional investors. Comparatively, 8.1% of GreenTree Hospitality Group shares are owned by institutional investors. 6.1% of First Watch Restaurant Group shares are owned by company insiders. Comparatively, 88.7% of GreenTree Hospitality Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for First Watch Restaurant Group and GreenTree Hospitality Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Watch Restaurant Group	1	1	8	1	2.82
GreenTree Hospitality Group	1	0	0	0	1.00

First Watch Restaurant Group presently has a consensus price target of $18.56, suggesting a potential upside of 82.99%. Given First Watch Restaurant Group’s stronger consensus rating and higher possible upside, equities research analysts clearly believe First Watch Restaurant Group is more favorable than GreenTree Hospitality Group.

Valuation and Earnings

This table compares First Watch Restaurant Group and GreenTree Hospitality Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Watch Restaurant Group	$1.22 billion	0.51	$19.43 million	$0.29	34.97
GreenTree Hospitality Group	$1.01 billion	0.10	$23.85 million	$0.05	20.20

GreenTree Hospitality Group has lower revenue, but higher earnings than First Watch Restaurant Group. GreenTree Hospitality Group is trading at a lower price-to-earnings ratio than First Watch Restaurant Group, indicating that it is currently the more affordable of the two stocks.

Summary

First Watch Restaurant Group beats GreenTree Hospitality Group on 12 of the 15 factors compared between the two stocks.

About First Watch Restaurant Group

First Watch Restaurant Group, Inc., through its subsidiaries, operates and franchises restaurants under the First Watch trade name in the United States. The company was formerly known as AI Fresh Super Holdco, Inc. and changed its name to First Watch Restaurant Group, Inc. in December 2019. First Watch Restaurant Group, Inc. was founded in 1983 and is based in Bradenton, Florida.

About GreenTree Hospitality Group

GreenTree Hospitality Group Ltd., through its subsidiaries, develops leased-and-operated, and franchised-and-managed hotels under the GreenTree Inns brand in the People's Republic of China. It also engages in investment holding activities; and provision of information technology services. The company was founded in 2004 and is headquartered in Shanghai, the People's Republic of China.