Could Investors Be Watching These Top Restaurant Stocks In The Stock Market Today?
As we navigate a post-pandemic world, investors could be looking around the stock market to invest in industries that are recovering from the pandemic. And one of these industries would be the restaurant stocks. Thankfully, eating out has now become a norm again with easing restrictions. And with more and more customers eating out again, this would theoretically translate to better revenues for restaurants. As such, investors could be keeping tabs on restaurant stocks as we enter a fresh earnings season.
Earlier this week, Wendy’s (NASDAQ: WEN) announced its entry into the metaverse. Teaming up with Meta Platform’s (NASDAQ: FB) Horizon Worlds, Wendy’s launched a new online community dubbed the ‘Wendyverse’. In the Wendyverse, fans can visit the company’s first virtual reality restaurant. Back on Earth, we have Sweetgreen (NYSE: SG). The mission-driven company announced last month that it will be opening its first ‘Sweetlane’ drive-thru concept within the next year. Launching in Schaumburg, Illinois, the new pilot restaurant will include the addition of the Sweetlane to increase convenience for digital customers. Given all these developments in the industry, let’s take a look at 4 top restaurant stocks to watch in the stock market today.
Restaurant Stocks To Buy [Or Sell] Today
- FAT Brands Inc. (NASDAQ: FAT)
- Dave & Buster’s Entertainment Inc. (NASDAQ: PLAY)
- Yum! Brands Inc. (NYSE: YUM)
- Dutch Bros Inc. (NYSE: BROS)
Starting us off today is FAT Brands, a leading multi-brand restaurant franchising company. It strategically develops, markets, and acquires restaurant concepts around the globe. This includes casual dining, fast-casual, and quick-service dining concepts. Its portfolio of brands includes Round Table Pizza, Fatburger, Johnny Rockets, and many other renowned brands. For a sense of scale, FAT franchises over 2,300 units worldwide. The company also boasts a strong brand pipeline for future acquisitions and has a scalable management platform.
Earlier this week, the company announced that it has signed 20 new development deals for quick-service brands. These include Round Table Pizza, Great American Cookies, Marble Slab Creamery, Hot Dog on a Stick, and Pretzelmaker. The aforementioned brands were part of Global Franchise Group, which FAT acquired last year. Evidently, through the acquisition, FAT Brands strategically expanded into the snack and pizza segments, with these companies being a part of its Quick-Service Division. The development deals signed by FAT will entail the creation of more than 50 new stores for the recently acquired brands. Altogether, FAT’s Quick-Service Division has more than 150 units in the pipeline, with 30 locations planned for this year. With FAT expanding its reach, should you invest in FAT stock?
Dave & Buster’s Entertainment
Dave & Buster’s is an owner and operator of high-volume entertainment and dining venues. The company offers its customers the opportunity to eat, drink, play, and watch all in one location. Put simply, you could have a social and fun time while having good food and beverages at the same time. Also, its stores are designed to accommodate premium sports viewing events, private parties, and business functions. Over the past six months, PLAY stock has risen by nearly 25%.
Last week, Main Event Entertainment announced that Ardent Leisure Group and RedBird Capital have entered into an agreement with Dave & Buster’s to acquire Main Event. For those unfamiliar, Main Event is one of the fastest-growing family entertainment brands in the country, with 50 operating locations nationwide. Main Event offers entertainment such as bowling, laser tag, arcade games and such. Accordingly, the acquisition is reported to be worth $835 million and is expected to close later this year. This strategic move poses an opportunity to merge two thriving brands with a uniquely different target demographic. Moreover, it will also enhance the breadth of offerings and experiences to each brand’s guests. With this acquisition in place, is PLAY stock a buy?
Another top restaurant stock on investors’ radar is Yum! Brands (YUM). For the uninitiated, the company operates famous restaurant brands such as KFC, Pizza Hut, Taco Bell, The Habit Burger Grill, and Wingstreet worldwide. The only exception would be in China, where it operates via a separate company, Yum China Holdings (NYSE: YUMC). In fact, YUM is one of the world’s largest fast-food restaurant companies in terms of system units. In 2021, the company had over 53,000 restaurants spread throughout 135 nations and territories worldwide.
Earlier in the month, it was reported that YUM had filed for NFT trademarks for KFC, Pizza Hut, and Taco Bell. According to the US Patent and Trademark Office (USPTO), trademarks have been filed for those three brands for virtual F&B products. Besides that, the trademarks included downloadable virtual goods such as NFTs, digital tokens, loyalty cards and even a video game software featuring NFTs and other virtual goods. As such, YUM joins a growing list of brands from various industries that have filed trademarks in the NFT space. And on that note, will you be watching YUM stock as it makes its next move?
Last, but not least, is Dutch Bros (BROS), an upcoming name in the U.S. specialty coffee scene. For the most part, it identifies itself as a high-growth operator and franchisor of drive-thru coffee shops. The company caters to coffee-drinker needs by offering them a selection of high-quality handcrafted beverages. For a sense of scale, BROS operates via a network of over 500 locations across the U.S. In March, the coffee chain operator reported its fourth-quarter and full-year 2021 financials.
Jumping in, revenue came in at $140.1 million, growing by 55.8% from last year. Moving on, system same shop sales grew by 10.1% in the fourth quarter and 15.3% on a two-year basis. Company-operated gross profit was $16.1 million, up by 15.4% year-over-year. BROS also opened 35 new shops this quarter, surpassing its period record of 33 shops. Besides, the company provided the following outlook. Namely, it expects to open at least 125 shops, of which at least 105 shops will be company-operated. Besides that, it projects total revenues to be in the range of $700 million to $715 million. With BROS continuing to steadily increase its footprint in the coffee industry, would you consider adding BROS stock to your portfolio?