Are These The Best Restaurant Stocks To Buy In Q4 2020?
The sector for restaurant stocks was badly affected when the pandemic took over the world. Many restaurants had to close locations temporarily or even worse, permanently. Some restaurants opened for takeout, but this didn’t work for all types of businesses. This caused the financials for these companies to be hurt in ways that they had never seen before. But despite this, many top restaurant stocks have been able to perform well throughout 2020.
Some restaurants that offer quicker food services like McDonald’s (MCD Stock Report) and Del Taco (TACO Stock Report) saw benefit from staying open. These types of restaurants were considered essential and did not have to close. Some of these companies even hit record highs this year. This has made this sector rather volatile, but potentially profitable in 2020. So let’s take a look at 3 restaurant stocks that have been performing well this year due to their adaptations to this new environment of the market.
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Top Restaurant Stocks To Buy [Or Sell] In Q4 2020: Wingstop Inc.
First on this list of restaurant stocks to watch is Wingstop Inc. (WING Stock Report). Wingstop is a chain of restaurants serving wings, fries, and more at over 1000 locations all over the world. The brand has grown to be very popular, with even celebrities like Rick Ross proudly owning multiple Wingstop locations. Throughout 2020, Wingstop has had its ups and downs. But the most important part is that WING stock has managed to reach new all-time highs in 2020.
Wingstop has seen a large increase in business throughout the year. In fact, shareholders of WING stock have received more than a 528% return this year. This company is actively opening more locations and expanding as the year progresses. Additionally, the CEO announced that he is still hiring new employees, although the rest of the industry is struggling. Wingstop’s system-wide sales have increased by 18.6%, and the company opened 28 new stores in the first quarter of 2020. Its total revenue increased 15.4% year over year to $55.4 million. That is why WING stock has made it to this list of restaurant stocks to watch.
In its shareholder letter, the company stated, “The strength of our performance is certainly reflected in our results, including a very strong start to the second quarter with April same-store sales growth in our domestic operations exceeding 30%.”
Top Restaurant Stocks To Buy [Or Sell] In Q4 2020: Chipotle Mexican Grill Inc.
Next up on this list of restaurant stocks to watch is Chipotle Mexican Grill Inc. (CMG Stock Report). Chipotle is a fast-food Mexican food chain that offers foods like tacos, burritos, bowls, and more. The company has thousands of locations and has seen exponential growth in the last decade. This company is a perfect example of a restaurant stock that benefitted from the state of the world in 2020. Chipotle has seen lots of sales through takeout and delivery, through services like DoorDash that it is outperforming this year.
CMG stock price was at $927 before the stock market crashed in March. In March, it saw a dip like most other restaurant stocks at the time. But since then, CMG stock price has gone up a large amount in 2020. As of October 5th, CMG stock is at $1253 a share on average.
This new growth for Chipotle has made early investors a good amount of profit. It seems that month over month, CMG stock continues to go up in price. Chipotle’s growth in 2020 shows that some food stocks have been able to make the most out of the pandemic situation. Chipotle’s ability to offer quick quality food has been the primary factor to its growth in a world where people are not eating at traditional restaurants anymore.
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Top Restaurant Stocks To Buy [Or Sell] In Q4 2020: Grubhub Inc.
Last on this list of restaurant stocks to watch comes Grubhub Inc. (GRUB Stock Report). Grubhub is one of the largest food delivery services in the United States. The company has skyrocketed in users in the last few years. It was reported in 2019 that the company had 20 million active users and more than 115,000 restaurants offering delivery and pickup through its app. Because of the massive increase in the food delivery market in 2020, Grubhub has been able to grow strong. A few months ago, the company decided to release its second-quarter results for 2020.
In these results, Grubhub stated that its food sales year over year grew more than 59% to $2.3 billion, from $1.5 billion. In addition to this growth, its revenue went up 41% year over year to $459 million.
Matt Maloney, the CEO of the company stated, “Our singular focus for the second quarter was to support our restaurant partners as much as possible in their time of need. With a little help from increased demand, we are proud to announce we were able to spend approximately $100 million supporting and keeping restaurants, drivers, and diners safe during these difficult times.”
Food delivery has become so popular that these services like Grubhub have offered a perfect solution for consumers. The only issue for Grubhub is its competition like Uber Eats, Doordash, and Postmates. It seems like in this market, this company has been able to hold its own though. And that is why GRUB stock is on this list of restaurant stocks.