Denny’s (NASDAQ:DENN) versus TH International (NASDAQ:THCH) Head-To-Head Review

TH International (NASDAQ:THCH) and Denny’s (NASDAQ:DENN) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.

Analyst Ratings

This is a breakdown of recent recommendations for TH International and Denny’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TH International	0	0	0	0	0.00
Denny’s	0	1	5	0	2.83

Denny’s has a consensus price target of $7.75, indicating a potential upside of 110.88%. Given Denny’s’ stronger consensus rating and higher possible upside, analysts clearly believe Denny’s is more favorable than TH International.

Insider & Institutional Ownership

91.8% of TH International shares are held by institutional investors. Comparatively, 85.1% of Denny’s shares are held by institutional investors. 4.2% of Denny’s shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares TH International and Denny’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TH International	-40.57%	N/A	-16.23%
Denny’s	4.77%	-50.01%	5.92%

Risk & Volatility

TH International has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, Denny’s has a beta of 2.08, meaning that its share price is 108% more volatile than the S&P 500.

Valuation and Earnings

This table compares TH International and Denny’s”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TH International	$1.45 billion	0.07	-$123.81 million	($2.55)	-1.15
Denny’s	$452.33 million	0.42	$21.57 million	$0.41	8.96

Denny’s has lower revenue, but higher earnings than TH International. TH International is trading at a lower price-to-earnings ratio than Denny’s, indicating that it is currently the more affordable of the two stocks.

Summary

Denny’s beats TH International on 11 of the 14 factors compared between the two stocks.

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.

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.