Head-To-Head Analysis: Dave & Buster’s Entertainment (NASDAQ:PLAY) versus Dutch Bros (NYSE:BROS)
by Mitch Edgeman · The Markets DailyDutch Bros (NYSE:BROS – Get Free Report) and Dave & Buster’s Entertainment (NASDAQ:PLAY – Get Free Report) are both retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.
Volatility and Risk
Dutch Bros has a beta of 2.54, suggesting that its share price is 154% more volatile than the S&P 500. Comparatively, Dave & Buster’s Entertainment has a beta of 1.79, suggesting that its share price is 79% more volatile than the S&P 500.
Profitability
This table compares Dutch Bros and Dave & Buster’s Entertainment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Dutch Bros | 4.87% | 9.56% | 2.82% |
| Dave & Buster’s Entertainment | 0.01% | 19.13% | 0.69% |
Earnings & Valuation
This table compares Dutch Bros and Dave & Buster’s Entertainment”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Dutch Bros | $1.64 billion | 5.10 | $79.84 million | $0.64 | 79.29 |
| Dave & Buster’s Entertainment | $2.13 billion | 0.18 | $58.30 million | ($0.04) | -270.75 |
Dutch Bros has higher earnings, but lower revenue than Dave & Buster’s Entertainment. Dave & Buster’s Entertainment is trading at a lower price-to-earnings ratio than Dutch Bros, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current recommendations and price targets for Dutch Bros and Dave & Buster’s Entertainment, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Dutch Bros | 0 | 3 | 20 | 1 | 2.92 |
| Dave & Buster’s Entertainment | 1 | 4 | 3 | 0 | 2.25 |
Dutch Bros currently has a consensus price target of $75.95, indicating a potential upside of 49.68%. Dave & Buster’s Entertainment has a consensus price target of $23.83, indicating a potential upside of 120.07%. Given Dave & Buster’s Entertainment’s higher probable upside, analysts clearly believe Dave & Buster’s Entertainment is more favorable than Dutch Bros.
Insider and Institutional Ownership
85.5% of Dutch Bros shares are owned by institutional investors. Comparatively, 91.5% of Dave & Buster’s Entertainment shares are owned by institutional investors. 42.4% of Dutch Bros shares are owned by company insiders. Comparatively, 2.0% of Dave & Buster’s Entertainment shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Summary
Dutch Bros beats Dave & Buster’s Entertainment on 11 of the 15 factors compared between the two stocks.
About Dutch Bros
Dutch Bros Inc., together with its subsidiaries, operates and franchises drive-thru shops in the United States. The company operates through Company-Operated Shops and Franchising and Other segments. It serves through company-operated shops and online channels under Dutch Bros; Dutch Bros Coffee; Dutch Bros Rebel; Dutch Bros; and Blue Rebel brands. Dutch Bros Inc. was founded in 1992 and is headquartered in Grants Pass, Oregon.
About Dave & Buster’s Entertainment
Dave & Buster's Entertainment, Inc. owns and operates entertainment and dining venues for adults and families. Its venues offer a menu of entrees and appetizers, as well as a selection of non-alcoholic and alcoholic beverages; and an assortment of entertainment attractions centered on playing games and watching live sports, and other televised events. The company operates its venues under the Dave & Buster's name. As of April 02, 2019, it owned and operated 125 venues in 39 states, Puerto Rico, and Canada. The company was founded in 1982 and is headquartered in Dallas, Texas.