Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 stocks made the list for top value stocks in the Restaurants & Bars industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Latest Restaurants & Bars Stock News

Before choosing which top Restaurants & Bars stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

There is a neutral 12-month forecast for the restaurants sector. The acceptance of digital sales, the loosening of worldwide Covid-19 travel restrictions, and a relatively healthy labor environment will likely continue to have positive tailwind effects on demand for restaurants in the coming year. Given how much the macroeconomic background has deteriorated over the course of the year, the impacts of these tailwinds will most certainly fade over the course of this year's second half. Many eateries have significantly cut back on their hours of operation, closed down locations, and raised pricing. The Food Away from Home CPI Index, which jumped 7.7% YoY in June 2022, the highest 12-month growth since November 1981, provides evidence of the price increase. This trend may persist, but as consumers become more cost conscious, it will have a more detrimental effect on some parts of the restaurant subindustry than others. Through July 8, 2022, the S&P restaurants sub-industry index fell 18.6% vs. the 28.5% decline for the Consumer Discretionary sector and 18.2% decline for the S&P 1500. In 2021, the S&P restaurants sub-industry index grew 20.1% vs. the 24.4% gain in the broader Consumer Discretionary sector and 26.7% advance to the S&P 1500.

Why Focus on Undervalued Restaurants & Bars Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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7 Undervalued Restaurants & Bars Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Restaurants & Bars industry for Thursday, January 05, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Restaurants & Bars industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Ark Restaurants Corp’s Value Grade

Value Grade:

Ark Restaurants Corp. owns and/or operates approximately 17 restaurants and bars, 17 fast food concepts. The Company’s four restaurant and bar facilities are located in New York City; one is located in Washington, D.C.; five are located in Las Vegas, Nevada; one is located in Atlantic City, New Jersey; four are located on the east coast of Florida and two are located on the gulf coast of Alabama. The Las Vegas operations include four restaurants within the New York-New York Hotel & Casino Resort and one restaurant within the Planet Hollywood Resort and Casino. In Atlantic City, New Jersey, the Company operates a restaurant in the Tropicana Hotel and Casino. The Florida operations include The Rustic Inn in Dania Beach, Shuckers in Jensen Beach, JB's on the Beach in Deerfield Beach, The Blue Moon Fish Company in Fort Lauderdale and the operation of four fast food facilities in Tampa and six fast food facilities in Hollywood, each at a Hard Rock Hotel and Casino.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Ark Restaurants Corp has a Value Score of 95, which is considered to be undervalued.

When you look at Ark Restaurants Corp’s price-to-sales ratio at 0.33 compared to the industry median at 1.16, this company has a lower price relative to revenue compared to its peers. This could make Ark Restaurants Corp’s stock more attractive for value investors.

Ark Restaurants Corp’s price-earnings ratio is 6.59 compared to the industry median at 20.28. This means it has a lower share price relative to earnings compared to its peers. This could make Ark Restaurants Corp more attractive for value investors.

Now, let’s assess Ark Restaurants Corp’s EV/EBITDA ratio, also known as enterprise multiple. At 5.2, when compared to the industry median of 12.3, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Ark Restaurants Corp’s shareholder yield is the same than its industry median ratio of 1.89%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Ark Restaurants Corp’s price-to-book ratio is lower than its industry median ratio of 2.97. This could make Ark Restaurants Corp more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Ark Restaurants Corp’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Ark Restaurants Corp’s price-to-free-cash-flow ratio is lower than its industry median ratio of 24.70. This could make Ark Restaurants Corp more attractive because the lower P/FCF ratio indicates that Ark Restaurants Corp is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Burgerfi International Inc’s Value Grade

Value Grade:

BurgerFi International, Inc., through its subsidiary, BurgerFi International, LLC, and additional subsidiaries collectively, BurgerFi is the franchisor of the BurgerFi concept. Its BurgerFi is a burger concept with approximately 118 BurgerFi restaurants (93 franchised and 25 corporate-owned) for delivering a premium burger. BurgerFi uses American angus beef. Its menu includes burgers, chicken + hot dogs, fries + onion rings, shakes + frozen custard, kid's meals and sauces. Its burger products include BurgerFi Burger, BurgerFi Cheeseburger, Ultimate Bacon Cheeseburger and Beyond Burger. Chicken + hot dogs menu includes Fi'ed Chicken Sandwich, Spicy Fi'ed Chicken Sandwich, and Texas Style Dog. Fries + onion rings menu includes fresh-cut fries, onion rings and Cry + Fry. Its Shakes + frozen custard offerings include custard cups, shakes and concretes. Its sauces include FI Sauce, Ghost Pepper Honey, Garlic Aioli, Bacon Jalapeno Ranch, Memphis Sweet BBQ and cheese sauce.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Burgerfi International Inc has a Value Score of 80, which is considered to be undervalued.

Burgerfi International Inc’s price-to-book ratio is higher than its peers. This could make Burgerfi International Inc less attractive for value investors when compared to the industry median at 2.97.

You can read more about Burgerfi International Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Dine Brands Global Inc’s Value Grade

Value Grade:

Dine Brands Global, Inc. together with its subsidiaries owns, franchises and operates the Applebee's Neighborhood Grill + Bar (Applebee's) concept in the bar and grill segment within the casual dining category of the restaurant industry. The Company also owns and franchises the International House of Pancakes (IHOP) concept in the family dining category of the restaurant industry. Its segments include franchise operations, company-operated restaurant operations, rental operations, and financing operations. The franchise operations segment consisted of approximately 1,611 restaurants operated by Applebee’s franchisees in the United States, and 1,751 restaurants operated by IHOP franchisees and area licensees in the United States. Its company-operated restaurant operations segment consists of approximately 69 Applebee's restaurants. Its Rental operations segments consists of lease or sublease agreements covering 598 IHOP franchised restaurants and two Applebee’s franchised restaurants.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Dine Brands Global Inc has a Value Score of 71, which is considered to be undervalued.

Dine Brands Global Inc’s price-earnings ratio is 12.8 compared to the industry median at 20.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Dine Brands Global Inc more attractive for value investors.

You can read more about Dine Brands Global Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Jack in the Box Inc.’s Value Grade

Value Grade:

Jack in the Box Inc. is a restaurant company that operates and franchises Jack in the Box quick-service restaurants (QSRs). The Company operates approximately 2,200 Jack in the Box quick-service restaurants, primarily in the western and southern United States, including one in Guam. Jack in the Box is a hamburger chain, which offers a selection of products, including classic burgers such as, Jumbo Jack burgers, and product lines, such as Buttery Jack burgers. It also offers breakfast sandwiches with freshly cracked eggs, tacos, curly fries, egg rolls, specialty sandwiches and real ice cream shakes, among other items. The Company allow its guests to customize meals to their tastes and order any product on the menu when they want it, including breakfast at night, or burgers and chicken in the morning. It also involves the concept of drive-thru restaurants. Its Jack in the Box restaurants have seating capacities, ranging from 20 to 100 people.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Jack in the Box Inc. has a Value Score of 64, which is considered to be undervalued.

Jack in the Box Inc.’s price-earnings ratio is 12.5 compared to the industry median at 20.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Jack in the Box Inc. more attractive for value investors.

You can read more about Jack in the Box Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Noble Roman's, Inc.’s Value Grade

Value Grade:

Noble Roman’s, Inc. sells and services franchises and licenses. The Company operates foodservice locations for stand-alone restaurants and non-traditional foodservice operations under the names Noble Roman’s Craft Pizza & Pub, Noble Roman’s Pizza, Noble Roman’s Take-N-Bake, and Tuscano’s Italian Style Subs. The Noble Roman’s Craft Pizza & Pub provides a selection of over 40 different toppings, cheeses, and sauces. Beer and wine are also featured, with approximately 16 different beers including both national and local craft selections. Beer and wine service is provided at the bar and throughout the dining room. The Company owns and operates seven craft pizza and pub locations and one non-traditional location in a hospital. The Company’s subsidiaries include Pizzaco, Inc. and RH Roanoke, Inc. The Company operates approximately 3,064 franchised or licensed outlets.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Noble Roman's, Inc. has a Value Score of 67, which is considered to be undervalued.

Noble Roman's, Inc.’s price-to-book ratio is higher than its peers. This could make Noble Roman's, Inc. less attractive for value investors when compared to the industry median at 2.97.

You can read more about Noble Roman's, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Rave Restaurant Group Inc’s Value Grade

Value Grade:

Rave Restaurant Group, Inc. owns and operates franchises, licenses and supplies Pie Five and Pizza Inn restaurants operating domestically and internationally. The Company operates and franchises pizza buffet, delivery/carry-out and express restaurants under the trademark Pizza Inn and franchises fast casual pizza restaurants (Pie Five Units) under the trademarks Pie Five Pizza Company (Pie Five). The Company also licenses Pizza Inn Express (PIE, kiosks) under the trademark Pizza Inn. The Company facilitates food, equipment and supply distribution to its domestic and international system of restaurants through agreements with third party distributors. The Company’s segments include Pizza Inn Franchising, Pie Five Franchising and Company-Owned Restaurants. The Pizza Inn and Pie Five Franchising segments establish franchisees, licensees and territorial rights. The Company-Owned Restaurants segment includes sales and operating results for all Company-owned restaurants.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Rave Restaurant Group Inc has a Value Score of 76, which is considered to be undervalued.

Rave Restaurant Group Inc’s price-earnings ratio is 3.5 compared to the industry median at 20.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Rave Restaurant Group Inc more attractive for value investors.

Rave Restaurant Group Inc’s price-to-book ratio is higher than its peers. This could make Rave Restaurant Group Inc less attractive for value investors when compared to the industry median at 2.97.

You can read more about Rave Restaurant Group Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Carrols Restaurant Group Inc’s Value Grade

Value Grade:

Carrols Restaurant Group, Inc. is a restaurant company. The Company operates two quick-service restaurant brands, Burger King and Popeyes. Burger King restaurants are fast-food hamburger restaurants that feature the flame-broiled Whopper sandwich, as well as a range of hamburgers, chicken and other specialty sandwiches, french fries, salads, breakfast items, snacks, soft drinks and more. It operates approximately 1,026 Burger King restaurants located in over 23 Northeastern, Midwestern, Southcentral and Southeastern states. Popeyes restaurants are quick-service chicken restaurants that feature a Louisiana-style menu, including fried chicken, chicken tenders, fried shrimp and other seafood, red beans and rice and other regional offerings. It operates approximately 65 Popeyes restaurants in over seven Southeastern states. The Company’s subsidiaries include Carrols Corporation, Carrols LLC, Carrols Holdco Inc., Republic Foods, Inc. and Cambridge Franchise Real Estate, LLC.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Carrols Restaurant Group Inc has a Value Score of 82, which is considered to be undervalued.

Carrols Restaurant Group Inc’s price-to-book ratio is higher than its peers. This could make Carrols Restaurant Group Inc less attractive for value investors when compared to the industry median at 2.97.

You can read more about Carrols Restaurant Group Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Restaurants & Bars Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Restaurants & Bars stocks as well as other industrys.

Choosing Which of the 7 Best Restaurants & Bars Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Ark Restaurants Corp stock has a Value Grade of A.
• Burgerfi International Inc stock has a Value Grade of B.
• Dine Brands Global Inc stock has a Value Grade of B.
• Jack in the Box Inc. stock has a Value Grade of B.
• Noble Roman's, Inc. stock has a Value Grade of B.
• Rave Restaurant Group Inc stock has a Value Grade of B.
• Carrols Restaurant Group Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 7 undervalued stocks in the Restaurants & Bars industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Restaurants & Bars Stocks

Want to learn more about Restaurants & Bars stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 7 Undervalued Restaurants & Bars Stocks for Thursday, January 05
• 3 Undervalued Restaurants & Bars Stocks for Wednesday, January 04
• Order Out With These Three Quick-Service Pizza Stocks
• 4 Undervalued Restaurants & Bars Stocks for Tuesday, January, 03

AAII Disclaimer

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