Comparing Star Buffet (OTCMKTS:STRZ) & Potbelly (OTCMKTS:PBPB)

Star Buffet (OTCMKTS:STRZ) and Potbelly (NASDAQ:PBPB) are both small-cap retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, earnings, dividends, profitability and analyst recommendations.

Institutional and Insider Ownership

60.4% of Potbelly shares are owned by institutional investors. 53.6% of Star Buffet shares are owned by insiders. Comparatively, 6.0% of Potbelly shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Star Buffet and Potbelly’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Star Buffet $26.04 million 0.03 -$540,000.00 N/A N/A
Potbelly $422.64 million 0.28 -$8.88 million $0.29 17.00

Star Buffet has higher earnings, but lower revenue than Potbelly.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Star Buffet and Potbelly, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Star Buffet 0 0 0 0 N/A
Potbelly 1 1 0 0 1.50

Potbelly has a consensus price target of $7.00, indicating a potential upside of 41.99%. Given Potbelly’s higher possible upside, analysts plainly believe Potbelly is more favorable than Star Buffet.

Risk & Volatility

Star Buffet has a beta of 2.53, suggesting that its share price is 153% more volatile than the S&P 500. Comparatively, Potbelly has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.

Profitability

This table compares Star Buffet and Potbelly’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Star Buffet -4.82% N/A -9.06%
Potbelly -6.59% -1.74% -0.50%

Star Buffet Company Profile

Star Buffet, Inc. owns and operates full service restaurants in the United States. As of July 19, 2018, it operated 27 restaurants in 10 states. The company operates its restaurants under the 4B's, JB's, Barnhill's Salads Buffet Desserts, Casa Bonita, and BuddyFreddys names. Star Buffet, Inc. was founded in 1997 and is based in Scottsdale, Arizona.

Potbelly Company Profile

Potbelly Corporation, through its subsidiaries, owns, operates, and franchises Potbelly Sandwich Works sandwich shops in the United States. The company offers toasty warm sandwiches, salads, soups, chili, sides, desserts, breakfast sandwiches, and steel cut oatmeal. As of February 25, 2019, the company operated approximately 400 shops in the United States; and approximately 50 franchisees operated shops in the United States, the Middle East, Canada, and India. The company was formerly known as Potbelly Sandwich Works, Inc. and changed its name to Potbelly Corporation in 2002. Potbelly Corporation was founded in 1977 and is headquartered in Chicago, Illinois.

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