Contrasting ONE Group Hospitality (NASDAQ:STKS) & Arc Group (OTCMKTS:RLLY)

Arc Group (OTCMKTS:RLLY) and ONE Group Hospitality (NASDAQ:STKS) are both retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Profitability

This table compares Arc Group and ONE Group Hospitality’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arc Group	N/A	N/A	N/A
ONE Group Hospitality	-10.21%	181.12%	1.76%

Analyst Recommendations

This is a summary of current ratings for Arc Group and ONE Group Hospitality, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arc Group	0	0	0	0	0.00
ONE Group Hospitality	1	3	3	1	2.50

ONE Group Hospitality has a consensus target price of $4.50, suggesting a potential upside of 113.27%. Given ONE Group Hospitality’s stronger consensus rating and higher possible upside, analysts clearly believe ONE Group Hospitality is more favorable than Arc Group.

Institutional and Insider Ownership

29.1% of ONE Group Hospitality shares are owned by institutional investors. 12.4% of Arc Group shares are owned by company insiders. Comparatively, 25.1% of ONE Group Hospitality shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Arc Group and ONE Group Hospitality”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arc Group	N/A	N/A	N/A	N/A	N/A
ONE Group Hospitality	$820.59 million	0.08	-$15.82 million	($3.73)	-0.57

Arc Group has higher earnings, but lower revenue than ONE Group Hospitality.

Summary

ONE Group Hospitality beats Arc Group on 9 of the 10 factors compared between the two stocks.

About Arc Group

ARC Group, Inc. engages in the operation of Dick’s Wings brand of restaurants. It offers its traditional and boneless chicken wings, hog wings, and duck wings spun in its signature sauces and seasonings. The firm oprates through the following segments; Company-Owned Restaurants and Franchise Operations. The Company-Owned Restaurants are casual dining restaurants. The Franchise Operations segment offers franchises for the Dick’s Wings brand. It also offers craft beers under the name Dick’s Craft Beers. The company was founded in April 2000 and is headquartered in Jacksonville, FL.

About ONE Group Hospitality

The ONE Group Hospitality, Inc., a restaurant company, develops, owns, operates, manages, and licenses restaurants and lounges worldwide. It operates through STK, Kona Grill, and ONE Hospitality segments. The company also provides turn-key food and beverage services for hospitality venues, including hotels, casinos, and other locations. Its hospitality food and beverage solutions include developing, managing, and operating restaurants, bars, rooftops, pools, banqueting, catering, private dining rooms, room service, and mini bars; and offers hospitality advisory and consulting services. The company operates restaurants primarily under the STK and Kona Grill brands. The ONE Group Hospitality, Inc. was founded in 2004 and is based in Denver, Colorado.