BDL vs. ARKR: Which Dining Stock Is the Better Buy Now?

Restaurant operators are facing a challenging operating backdrop marked by uneven consumer spending, elevated labor and food costs and the continued need to refresh concepts to maintain traffic. In this environment, Ark Restaurants Corp. ARKR and Flanigan’s Enterprises, Inc. BDL represent two niche players within the restaurants-and-bars industry, each pursuing a distinct operating strategy. ARKR operates a collection of destination-oriented restaurants, bars and food concepts concentrated in high-traffic urban and tourist markets, while BDL focuses on a Florida-centric portfolio of casual dining restaurants and package liquor stores.

Ark Restaurants’ business benefits from premium locations and event-driven demand, which can support higher average checks and strong seasonal volumes. However, this model also introduces concentration risk tied to individual properties, lease renewals and location-specific disruptions. In contrast, Flanigan’s emphasizes standardized neighborhood dining, repeat local traffic and a diversified revenue base that includes high-volume liquor retail, which can provide more consistent demand but remains sensitive to Florida’s competitive labor market and regulatory environment.

With both companies operating in the same industry but differing sharply in geography, scale and risk exposure, the key question for investors is whether ARKR’s location-driven upside or BDL’s locally anchored stability offers the more attractive risk-reward profile in the current operating climate. Let’s take a closer look.

Stock Performance & Valuation: BDL vs. ARKR

BDL (down 1%) has outperformed ARKR (down 7.7%) over the past three months. In the past year, Flanigan’s has rallied 23.5% against Ark Restaurants’ loss of 50.4%.

Meanwhile, BDL is trading at a trailing 12-month enterprise value-to-sales (EV/S) ratio of 0.28X, above its median of 0.26X over the past five years. ARKR’s trailing EV/S multiple sits at 0.09X, below its last five-year median of 0.27X. BDL and ARKR both appear to be cheap when compared with the Retail-Wholesale sector average of 1.90X.

Factors Driving Flanigan’s Stock

Flanigan’s benefits from a business mix that extends beyond traditional casual dining. Alongside its restaurants, the company operates and franchises high-volume package liquor stores, which provide a steady traffic driver and help balance demand during periods of uneven consumer spending. This dual-revenue structure allows BDL to capture both on-premise dining and off-premise alcohol purchases, supporting overall revenue stability and cushioning volatility tied to discretionary dining trends.

Management has demonstrated an ability to navigate inflationary pressures through measured menu price increases and centralized purchasing practices. Price adjustments across food and bar offerings have helped offset higher labor, food and insurance costs without materially disrupting traffic, while standardized menus and procurement support margin control. This disciplined approach has translated into improved profitability even as operating expenses continue to rise industrywide.

Flanigan’s continues to prioritize controlled expansion through limited partnerships rather than aggressive franchising or rapid unit growth. This model allows the company to retain operational oversight, earn management fees and royalties and limit capital risk while expanding selectively. Combined with a strong local brand presence and repeat neighborhood traffic, this strategy reinforces cash flow visibility and supports long-term shareholder value.

Factors Driving Ark Restaurants Stock

Ark Restaurants’ portfolio is built around large, destination restaurants located in high-visibility urban, tourist and entertainment hubs such as Las Vegas resorts, Bryant Park in New York City and waterfront markets in Florida and Alabama. These locations benefit from event-driven demand, catering activity and seasonal traffic, allowing certain properties — particularly in Las Vegas and select Florida markets — to generate strong cash flow even amid uneven broader restaurant traffic trends.

Management continues to actively reshape the portfolio by exiting underperforming assets and reallocating capital toward higher-return opportunities. Ark Restaurants’ exit from the Tampa Food Court lease and the closure of El Rio Grande streamlined operations and strengthened liquidity, while ongoing refresh investments at Las Vegas properties aim to sustain relevance and improve efficiency. This willingness to prune and reinvest supports longer-term operational stability despite near-term revenue pressure.

Ark Restaurants’ minority investment in New Meadowlands Racetrack introduces potential long-term optionality beyond its core restaurant operations. If regulatory approvals advance, the company holds exclusive food-and-beverage operating rights tied to a potential casino development, creating a pathway for incremental revenue without requiring full-scale development risk. While uncertain, this embedded optionality remains a notable factor influencing investor interest in the stock.

Choose BDL Over ARKR Now

While both Ark Restaurants and Flanigan’s operate in the broader restaurant-and-bars industry, their recent performance and underlying fundamentals point to very different risk-reward profiles. Over the past year, Flanigan’s stock has delivered a sharp rally, significantly outperforming Ark Restaurants, whose shares have seen a steep decline. This divergence reflects not just sentiment but also the relative stability embedded in each company’s operating model.

Ark Restaurants’ business is heavily oriented toward destination-driven, event-sensitive venues in premium urban and tourist locations. While this structure can benefit from strong travel and event demand, it also leaves ARKR more exposed to location-specific disruptions and concentrated asset risk, particularly when marquee properties face operational or legal uncertainty. In contrast, Flanigan’s operates a Florida-focused, neighborhood-oriented model supported by both casual dining and high-volume liquor retail. This diversified revenue mix, combined with a loyal local customer base and standardized operations, provides more consistent demand visibility across economic cycles.

From a valuation standpoint, both stocks screen as inexpensive relative to the broader Retail-Wholesale sector, but Flanigan’s trades closer to its historical norms, reflecting investor confidence in its earnings durability. Taken together, BDL’s superior stock performance, steadier operating structure and more predictable demand drivers make it the more compelling choice for investors seeking stability, while ARKR remains a higher-risk option tied to concentrated, event-driven outcomes.

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This article originally published on Zacks Investment Research (zacks.com).

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