Financial Analysis: Denny’s (NASDAQ:DENN) vs. Giggles N’ Hugs (OTCMKTS:GIGL)

Denny’s (NASDAQ:DENN) and Giggles N’ Hugs (OTCMKTS:GIGL) are both small-cap retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, earnings, profitability, risk, analyst recommendations and dividends.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Denny’s and Giggles N’ Hugs, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Denny’s	1	5	2	0	2.13
Giggles N’ Hugs	0	0	0	0	0.00

Denny’s presently has a consensus target price of $5.96, indicating a potential downside of 2.94%. Given Denny’s’ stronger consensus rating and higher possible upside, research analysts clearly believe Denny’s is more favorable than Giggles N’ Hugs.

Volatility and Risk

Denny’s has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500. Comparatively, Giggles N’ Hugs has a beta of 0.28, suggesting that its share price is 72% less volatile than the S&P 500.

Profitability

This table compares Denny’s and Giggles N’ Hugs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Denny’s	3.53%	-59.51%	4.90%
Giggles N’ Hugs	N/A	N/A	N/A

Institutional and Insider Ownership

85.1% of Denny’s shares are owned by institutional investors. 4.2% of Denny’s shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Denny’s and Giggles N’ Hugs”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Denny’s	$457.21 million	0.69	$21.57 million	$0.20	30.73
Giggles N’ Hugs	N/A	N/A	N/A	N/A	N/A

Denny’s has higher revenue and earnings than Giggles N’ Hugs.

Summary

Denny’s beats Giggles N’ Hugs on 9 of the 10 factors compared between the two stocks.

About Denny’s

Denny’s Corp. engages in the operation of restaurants and franchised, and licensed restaurants. It operates through the Denny’s and Other segments. The Denny’s segment includes the results of all company and franchised and licensed Denny’s restaurants. The Other segment refers to the results of all company and franchise restaurants. The company was founded by Harold Butler and Richard Jezak in 1953 and is headquartered in Spartanburg, SC.

About Giggles N’ Hugs

Giggles N’ Hugs, Inc. engages in the ownership and operation of restaurants. It offers an upscale family-friendly atmosphere with a play area dedicated to children ages 10 and younger. The restaurant has a menu made from fresh, organic foods with the play elements and entertainment. The company was founded by Joey Parsi and Dorsa Foroughi on September 17, 2004 and is headquartered in Los Angeles, CA.