Contrasting Cosi (COSIQ) & RCI Hospitality (RICK)

Cosi (OTCMKTS: COSIQ) and RCI Hospitality (NASDAQ:RICK) are both small-cap retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, earnings, risk, valuation and dividends.

Profitability

This table compares Cosi and RCI Hospitality’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cosi -13.67% -96.97% -38.82%
RCI Hospitality 7.84% 10.75% 5.08%

Risk & Volatility

Cosi has a beta of -1.23, indicating that its stock price is 223% less volatile than the S&P 500. Comparatively, RCI Hospitality has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Cosi and RCI Hospitality, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cosi 0 0 0 0 N/A
RCI Hospitality 0 0 1 0 3.00

RCI Hospitality has a consensus target price of $30.00, suggesting a potential downside of 2.34%. Given RCI Hospitality’s higher probable upside, analysts plainly believe RCI Hospitality is more favorable than Cosi.

Dividends

RCI Hospitality pays an annual dividend of $0.12 per share and has a dividend yield of 0.4%. Cosi does not pay a dividend. RCI Hospitality pays out 10.6% of its earnings in the form of a dividend.

Institutional and Insider Ownership

37.6% of Cosi shares are held by institutional investors. Comparatively, 48.7% of RCI Hospitality shares are held by institutional investors. 7.8% of Cosi shares are held by company insiders. Comparatively, 7.6% of RCI Hospitality shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Cosi and RCI Hospitality’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cosi N/A N/A N/A ($0.30) -0.01
RCI Hospitality $134.86 million 2.21 $11.08 million $1.13 27.19

RCI Hospitality has higher revenue and earnings than Cosi. Cosi is trading at a lower price-to-earnings ratio than RCI Hospitality, indicating that it is currently the more affordable of the two stocks.

Summary

RCI Hospitality beats Cosi on 10 of the 12 factors compared between the two stocks.

Cosi Company Profile

Cosi, Inc. is an international fast casual restaurant company. The Company offers its flatbread. Its menu features made-to-order sandwiches, hand-tossed salads, bowls, breakfast wraps, melts, soups, signature Squagels, artisan flatbread pizzas, S’mores, snacks and desserts. It also offers handcrafted beverages and a variety of coffee-based and specialty beverages. Its sandwiches include tbm, turkey and brie, tuna, turkey avocado and chicken parmesan melt. Its cosi salads are made with fresh ingredients and its own signature dressings. Its soups include tomato basil, turkey chili, smart fit chicken noodle, and mediterranean lentil. Its handcrafted beverages include iced tea, raspberry iced tea, country club iced tea, mojito lemonade, raspberry mojito lemonade. It also offers catering services to its customers. The Company operates in 43 Company-owned and 30 franchise restaurants in fourteen states in the United States, the District of Columbia, Costa Rica and the United Arab Emirates.

RCI Hospitality Company Profile

With more than 40 units, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in gentlemen’s clubs and sports bars/restaurants. Clubs in New York City, Miami, Philadelphia, Charlotte, Dallas/Ft. Worth, Houston, Minneapolis, and other cities operate under brand names, such as “Rick’s Cabaret,” “XTC,” “Club Onyx,” “Vivid Cabaret,” “Jaguars” and “Tootsie’s Cabaret.” Sports bars/restaurants operate under the brand name “Bombshells Restaurant & Bar.” Investors are attracted by RCI’s strong cash flow, operating margins and local laws that create high barriers to entry in the gentlemen’s club business.

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