Contrasting First Watch Restaurant Group (NASDAQ:FWRG) and TH International (NASDAQ:THCH)

First Watch Restaurant Group (NASDAQ:FWRG) and TH International (NASDAQ:THCH) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.

Institutional and Insider Ownership

96.1% of First Watch Restaurant Group shares are owned by institutional investors. Comparatively, 91.8% of TH International shares are owned by institutional investors. 5.0% of First Watch Restaurant Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

First Watch Restaurant Group has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500. Comparatively, TH International has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500.

Valuation and Earnings

This table compares First Watch Restaurant Group and TH International”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Watch Restaurant Group	$891.55 million	1.40	$25.39 million	$0.33	62.64
TH International	$1.45 billion	0.07	-$123.81 million	($2.55)	-1.24

First Watch Restaurant Group has higher earnings, but lower revenue than TH International. TH International 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Watch Restaurant Group	2.09%	3.61%	1.53%
TH International	-40.57%	N/A	-16.23%

Analyst Ratings

This is a breakdown of recent ratings for First Watch Restaurant Group and TH International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Watch Restaurant Group	0	2	7	1	2.90
TH International	0	0	0	0	0.00

First Watch Restaurant Group presently has a consensus price target of $23.30, indicating a potential upside of 12.72%. Given First Watch Restaurant Group’s stronger consensus rating and higher probable upside, research analysts plainly believe First Watch Restaurant Group is more favorable than TH International.

Summary

First Watch Restaurant Group beats TH International on 14 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 TH International

TH International Limited operates Tim Hortons coffee shops in mainland China, Hong Kong, and Macau. The company offers brewed tea, coffee, milk tea, lemonade, hot chocolate, and coffee drinks. It is also involved in franchise related business. The company is based in Shanghai, the People's Republic of China.