We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Dunkin' Brands Outruns Peers: Stock Surges 24% in a Year
Read MoreHide Full Article
Dunkin' Brands Group, Inc. is heavily focusing on various sales-building initiatives like aggressive expansion and enhancement of beverage portfolio. The company also continues to rely on refranchising in order to boost earnings. Resultantly, with an impressive share price appreciation, the stock is a profitable investment choice at the moment.
Shares of Dunkin’ Brands have outperformed its industry in the past year. The stock has returned 24.1% compared with the industry’s rally of 12.1%. Moreover, an upward revision in earnings estimates for 2018 reflects analysts’ confidence in the company’s future potential. Over the past 30 days, the Zacks Consensus Estimate for earnings in 2018 has moved up 3.7%. Further, the company delivered positive earnings surprise in each of the trailing four quarters, the average beat being 9.6%.
Dunkin’ Brands currently carries a Zacks Rank #2 (Buy) and has a Momentum Score of B. Back-tested results show that stocks that have the combination of Momentum Scores of A or B and a Zacks Rank #1 (Strong Buy) or 2 can handily outperform peers.
Let’s delve deeper into the other factors that make this stock a solid pick.
Strong Brand Recognition & Expansion
Dunkin' Brands is considered as one of the well-established global quick-service restaurant brands. As a result, it enjoys enormous customer trust and brand loyalty, making it easier for Dunkin' to launch product lines. The company’s increased focus on menu innovation, especially on premium products to offer great beverages, is likely to drive growth.
Moreover, given its growing popularity, the company is expanding its footprint in the emerging markets of Asia and the Middle East. It also considers the untapped market of South Africa a great potential and has inked a franchise agreement to develop more than 250 Dunkin' restaurants and more than 70 Baskin-Robbins shops in here over the coming years. Such expansion strategies should boost the company’s top line. It sees Chile, Philippines, Thailand and Germany on the top of its priority list as these are driving positive results.
Top Line to Grow on Sales Building Initiatives
Dunkin' Brands continues to boost sales through regular product launches. With the demand for coffee expected to grow in the months ahead, Dunkin is continuously adding coffee beverages to the menu, both in the value and premium offering segment like the Macchiato's line of products and the recent — Cold Brew coffee. On an incremental sales basis, cold brew has been the most successful product launch and is helping to drive the brand’s coffee credibility. In fact, in the third quarter of 2018, Cold Brew and frozen beverages continued the momentum and led growth across the beverage portfolio. The company already introduced ready-to-drink bottled iced coffee and Fruited Iced Teas, Dunkin' Energy Punch powered by Monster Energy, and frozen coffee last year.
Apart from innovation across menu chains, the company is growing in terms of its use of digital technology through DD card, DD mobile app, DD Perks rewards program, and On-the-Go ordering and delivery.
All these strategies are indicative of the company’s expected top-line growth in 2018. The Zacks Consensus Estimate for sales in 2018 is pegged at $1.3 billion, reflecting 54.9% year-over-year growth.
Refranchising Strategy Safeguards Earnings
Dunkin' Brands operates on a full-fledged franchise model. We believe refranchising a large chunk of its system reduces the company’s capital requirements and facilitates earnings per share growth. Meanwhile, free cash flow continues to grow, facilitating reinvestment to increase brand recognition and shareholders’ return. Moreover, since a major portion of its business is refranchised, Dunkin’ Brands is less affected by food-cost inflation compared with peers.
Arguably, earnings growth is of the utmost importance for determining a stock’s potential as surging profit levels often indicate solid prospects (and stock-price gains). In 2018, Dunkin’ Brands’ earnings per share are expected to grow 16.5%.
Current-year earnings estimates for BJ’s Restaurants, Dave & Buster’s and El Pollo Loco are 64.5%, 6.2% and 14.3%, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Dunkin' Brands Outruns Peers: Stock Surges 24% in a Year
Dunkin' Brands Group, Inc. is heavily focusing on various sales-building initiatives like aggressive expansion and enhancement of beverage portfolio. The company also continues to rely on refranchising in order to boost earnings. Resultantly, with an impressive share price appreciation, the stock is a profitable investment choice at the moment.
Shares of Dunkin’ Brands have outperformed its industry in the past year. The stock has returned 24.1% compared with the industry’s rally of 12.1%. Moreover, an upward revision in earnings estimates for 2018 reflects analysts’ confidence in the company’s future potential. Over the past 30 days, the Zacks Consensus Estimate for earnings in 2018 has moved up 3.7%. Further, the company delivered positive earnings surprise in each of the trailing four quarters, the average beat being 9.6%.
Dunkin’ Brands currently carries a Zacks Rank #2 (Buy) and has a Momentum Score of B. Back-tested results show that stocks that have the combination of Momentum Scores of A or B and a Zacks Rank #1 (Strong Buy) or 2 can handily outperform peers.
Let’s delve deeper into the other factors that make this stock a solid pick.
Strong Brand Recognition & Expansion
Dunkin' Brands is considered as one of the well-established global quick-service restaurant brands. As a result, it enjoys enormous customer trust and brand loyalty, making it easier for Dunkin' to launch product lines. The company’s increased focus on menu innovation, especially on premium products to offer great beverages, is likely to drive growth.
Moreover, given its growing popularity, the company is expanding its footprint in the emerging markets of Asia and the Middle East. It also considers the untapped market of South Africa a great potential and has inked a franchise agreement to develop more than 250 Dunkin' restaurants and more than 70 Baskin-Robbins shops in here over the coming years. Such expansion strategies should boost the company’s top line. It sees Chile, Philippines, Thailand and Germany on the top of its priority list as these are driving positive results.
Top Line to Grow on Sales Building Initiatives
Dunkin' Brands continues to boost sales through regular product launches. With the demand for coffee expected to grow in the months ahead, Dunkin is continuously adding coffee beverages to the menu, both in the value and premium offering segment like the Macchiato's line of products and the recent — Cold Brew coffee. On an incremental sales basis, cold brew has been the most successful product launch and is helping to drive the brand’s coffee credibility. In fact, in the third quarter of 2018, Cold Brew and frozen beverages continued the momentum and led growth across the beverage portfolio. The company already introduced ready-to-drink bottled iced coffee and Fruited Iced Teas, Dunkin' Energy Punch powered by Monster Energy, and frozen coffee last year.
Apart from innovation across menu chains, the company is growing in terms of its use of digital technology through DD card, DD mobile app, DD Perks rewards program, and On-the-Go ordering and delivery.
All these strategies are indicative of the company’s expected top-line growth in 2018. The Zacks Consensus Estimate for sales in 2018 is pegged at $1.3 billion, reflecting 54.9% year-over-year growth.
Refranchising Strategy Safeguards Earnings
Dunkin' Brands operates on a full-fledged franchise model. We believe refranchising a large chunk of its system reduces the company’s capital requirements and facilitates earnings per share growth. Meanwhile, free cash flow continues to grow, facilitating reinvestment to increase brand recognition and shareholders’ return. Moreover, since a major portion of its business is refranchised, Dunkin’ Brands is less affected by food-cost inflation compared with peers.
Arguably, earnings growth is of the utmost importance for determining a stock’s potential as surging profit levels often indicate solid prospects (and stock-price gains). In 2018, Dunkin’ Brands’ earnings per share are expected to grow 16.5%.
Source: https://www.zacks.com
Other Stocks to Consider
Other top-ranked stocks from the restaurant space include BJ’s Restaurants (BJRI - Free Report) , Dave & Buster’s (PLAY - Free Report) and El Pollo Loco (LOCO - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Current-year earnings estimates for BJ’s Restaurants, Dave & Buster’s and El Pollo Loco are 64.5%, 6.2% and 14.3%, respectively.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>