The best restaurant stocks for the third quarter of 2022
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The restaurant industry ranges from local family restaurants to national and global chains. The industry is notoriously difficult for business owners, with around 60% of new restaurants failing in their first year. One reason for this is that restaurant spending tends to be narrowly discretionary, fluctuating widely with the broader economic system. As businesses have begun to rebound, monetary pressure has mounted sharply on restaurants and restaurant chains during the COVID-19 pandemic as many of them have faced rising prices, growing indebtedness and declining sales. A number of the more well-known publicly traded eating places include McDonald’s Corp. and Chipotle Mexican Grill Inc.
The restaurant sector, as represented by the Dow Jones US Eating Places & Bars Index, underperformed the broader market with a full return of -8.6% over the previous 12 months, as of June 8, 2022. By comparison, the total return of the Russell 1000 over the same interval is -3.5%. All statistics in the tables below are also as of June 8, 2022.
Here are the 3 highest restaurant shares with the highest value, fastest progress, and most momentum.
These are the restaurant stocks with the lowest 12-month price-to-earnings (P/E) ratio. Since profits can be returned to shareholders in the form of dividends and redemptions, a low P/E ratio indicates that you are paying less for every dollar of income generated.
| Finest Worth Restaurant Stock | |||
|---|---|---|---|
| Value ($) | Market capitalization ($B) | 12 month price/earnings ratio | |
| Denny’s Corp. (DENN) | 10.54 | 0.7 | 8.9 |
| Brinker Worldwide Inc. (EAT) | 29.92 | 1.3 | 9.2 |
| The ONE Group Hospitality Inc. (STKS) | 9.59 | 0.3 | 9.3 |
Source: YCharts
- Denny’s Corp. : Denny’s operates a chain of full-service franchise restaurants. Denny’s restaurants offer goodies, including all-day breakfast meals, burgers, sandwiches, salads and assorted drinks, appetizers and desserts. The company announced in early May the appointment of Kelli Valade as Chief Government Officer (CEO) and Chairman, effective June 13, 2022. Vallade, who has thirty years of restaurant experience, will succeed John Miller.
- Brinker Worldwide Inc.: Brinker Worldwide owns, operates and franchises Chili’s Grill & Bar and Maggiano’s Little Italy restaurant makers, in addition to digital makers. The company mainly operates in the United States. The company announced in mid-2020 the retirement of CEO Wyman Roberts. Roberts can be replaced by Kevin Hochman, who can be both CEO and President. Hochman most recently served as President and Chief Ideas Officer for KFC, USA. Hochman was also named president of Chili’s and a member of the board of directors of Brinker Worldwide.
- The ONE Group Hospitality Inc.: ONE Group is a global hospitality company. The company develops and operates upscale restaurants and lounges. It also offers hotel administration services for accommodations, casinos, and other high-end venues.
These are the highest restaurant shares, ranked by an evolutionary model that scores companies based on a 50/50 weighting of their most recent quarterly progress in proportional revenue over the year and their most recent quarterly profit for the year. share (EPS) progress. Sales and gross revenue are critical to the success of a business. Subsequently, rating companies by a single measure of progress makes a rating subject to accounting anomalies in that quarter (such as tax law adjustments or restructuring awards) that will render either criterion unrepresentative. of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.
| Fastest rising restaurant stocks | ||||
|---|---|---|---|---|
| Value ($) | Market capitalization ($B) | EPS development (%) | Revenue development (%) | |
| Luckin Espresso Inc. (LKNCY) | 12.70 | 3.4 | N/A (see cabinet description) | 93.5 |
| Sweetgreen Inc. (SG) | 16.29 | 1.8 | N/A (see cabinet description) | 67.1 |
| Dutch Bros Inc. (BROS) | 39.25 | 2.1 | N/A (see cabinet description) | 54.0 |
Source: YCharts and Sweetgreen Inc.
- Luckin Espresso Inc.: Luckin Espresso is a China-based holding company that operates an espresso retail business. The Company primarily operates through mobile apps and pickup stores. It sells freshly made drinks, juices and light meals. Luckin Espresso announced on April 11 that it had successfully completed its monetary debt restructuring and exit from chapter proceedings. On April 8, the courtroom granted Luckin Espresso its request to close its chapter case. Because the company’s EPS went from unfavorable in the prior year quarter to positive in the last quarter, an EPS progression fee could not be calculated for the above office.
- Sweetgreen Inc.: Sweetgreen operates a series of fast-casual food outlets aimed at serving healthy meals. Its menu consists of meals composed of contemporary components in addition to natural and local products. Since the company reported unfavorable EPS in its last quarter, no EPS progression fee was calculated for the above office.
- Dutch Bros Inc.: Dutch Bros operates and franchises drive-thru retailers that serve craft drinks. The company offers a range of cold and hot drinks. It operates in different states across the United States. Since the company reported unfavorable EPS in its last quarter, no EPS progression fee was calculated for the above office.
Restaurant stocks have had the best overall performance over the past 12 months.
| The restaurant shares with the most momentum | |||
|---|---|---|---|
| Value ($) | Market capitalization ($B) | Full return over 12 months (%) | |
| Luckin Espresso Inc. (LKNCY) | 12.70 | 3.4 | 45.1 |
| Arcos Dorados Holdings Inc. (ARCO) | 7.80 | 1.6 | 21.0 |
| McDonald’s Corp. (MCD) | 245.61 | 181.6 | 8.0 |
| Russell 1000 | N / A | N / A | -3.5 |
| Dow Jones Index of food places and bars in the United States | N / A | N / A | -8.6 |
Source: YCharts
- Luckin Espresso Inc.: See above for company description.
- Arcos Dorados Holdings Inc.: Arcos Dorados Holdings is a McDonald’s franchisee based in Uruguay. It operates thousands of restaurants across Latin America and the Caribbean, making it the largest unbiased McDonald’s franchisee on this planet.
- McDonald’s Corp. : McDonald’s operates and franchises fast food restaurants worldwide. The company’s menu consists of burgers, fries, sandwiches, a variety of drinks and extras. McDonald’s announced in May that it was exiting the Russian market and would promote its Russian companies to its current licensee Alexander Govor. As part of the sale settlement, Govor will purchase the Company’s entire restaurant portfolio and operate all restaurants under a new name. Monetary details of the transaction were not disclosed. Nonetheless, McDonald’s expects to write off between $1.2 billion and $1.4 billion associated with the sale.
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