Coffee, doughnut, sandwich and ice cream retailerDunkin'
) is a young player in the dividend space.
The company began paying a quarterly dividend of 15 cents a
share in March 2012, and increased the payout to 19 cents a share
The annualized yield is 1.8% vs. 2.50% for the S&P
While the dividend payout is on the light side, capital
appreciation paints a different picture. Dunkin' Brands is up
more than 30% year to date vs. 16% for the S&P 500.
New factors could be behind the outperformance.
In 2006, a consortium of private equity firms wrapped up the
acquisition of Dunkin' Brands and brought a strategy to take the
then-regional franchiser national. An IPO was launched in
As of June, Dunkin' Donuts restaurants were in 40 states and
30 foreign countries, and Baskin-Robbins stores were in 43 states
and 45 countries.
Internationally, Vietnam is the latest new market for Dunkin'
At the July 25 earnings call, CEO Nigel Travis said the
company also is growing outside the morning business, offering
sandwiches and snacks.
Earnings grew 161%, 16% and 51% in the past three years. The
Street expects 20% EPS growth this year on a 7% sales pop. Annual
revenue growth has been in the 5% to 9% neighborhood in recent
Pretax margin was 35.5% last year, the best in at least seven
years. Return on equity, a measure of financial efficiency, was
27%. One negative is the debt-to-equity ratio, which is at
The stock is extended from a 40.10 buy point in a flat base.
However, Dunkin' is consolidating along its 10-week line. A new
base would still be early stage, thanks to several base-on-base