Potbelly (NASDAQ:PBPB) and BBQ (NASDAQ:BBQ) are both small-cap retail/wholesale companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, valuation, risk, earnings and institutional ownership.
Volatility & Risk
Potbelly has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500. Comparatively, BBQ has a beta of 2.13, meaning that its share price is 113% more volatile than the S&P 500.
Profitability
This table compares Potbelly and BBQ’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Potbelly | -23.61% | -274.80% | -15.86% |
| BBQ | -5.93% | -13.13% | -2.57% |
Institutional & Insider Ownership
47.7% of Potbelly shares are held by institutional investors. Comparatively, 48.9% of BBQ shares are held by institutional investors. 4.8% of Potbelly shares are held by insiders. Comparatively, 43.8% of BBQ shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Potbelly and BBQ’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Potbelly | $291.28 million | 0.76 | -$65.39 million | ($1.94) | -4.07 |
| BBQ | $121.44 million | 1.03 | $4.95 million | N/A | N/A |
BBQ has lower revenue, but higher earnings than Potbelly.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Potbelly and BBQ, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Potbelly | 0 | 0 | 0 | 0 | N/A |
| BBQ | 0 | 0 | 1 | 0 | 3.00 |
BBQ has a consensus target price of $15.00, suggesting a potential upside of 11.28%. Given BBQ’s higher possible upside, analysts plainly believe BBQ is more favorable than Potbelly.
Summary
BBQ beats Potbelly on 10 of the 12 factors compared between the two stocks.
Potbelly Company Profile
Potbelly Corporation, through its subsidiaries, owns, operates, and franchises Potbelly 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 December 27, 2020, the company operated approximately 400 shops and 46 franchisees operated shops in the United States. 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.
BBQ Company Profile
BBQ Holdings, Inc. develops, owns, operates, and franchises casual and fast dining restaurants under the Famous Dave's, Clark Crew BBQ, Granite City Food & Brewery, and Real Urban Barbecue names in the United States, Canada, and the United Arab Emirates. It offers smoked, barbequed, and grilled meats, as well as entrée items, and side dishes and appetizers. The company operates full-service and counter-service restaurants. As of January 3, 2021, it had 145 brick and mortar locations, including 47 company-owned and 98 franchise-operated restaurants in 31 states and three countries, as well as seven company-owned Famous Dave's ghost kitchens in Granite City locations, and seven Famous Dave's franchisee ghost kitchens in another restaurant location or a shared kitchen space. BBQ Holdings, Inc. was incorporated in 1994 and is based in Minnetonka, Minnesota.