Texas Roadhouse (
) serves up big portions of food in a fun and friendly atmosphere
for diners. For investors, the company delivers growth and rising
Last week, the restaurant operator posted a fourth-quarter
profit of 24 cents a share, up 26% vs. the year-ago period. That
marked an improvement from flat earnings in Q2 and a small
decline in the third quarter. Revenue in the latest quarter
jumped 21% to $376 million -- the biggest gain in years.
An extra week in the final quarter of 2013 helped lift Texas
Roadhouse's top-line and bottom-line growth. During the fourth
quarter, Texas Roadhouse opened 12 new company-owned restaurants
and one franchised store. It expects to open another 25 to 30
company locations in 2014.
For all of 2013, Texas Roadhouse's earnings grew 9% to $1.13 a
share from $1.04 a share in 2012. The 2012 figure excluded a
one-time charge. Sales rose 13% to $1.42 billion, marking a third
straight year of double-digit growth.
Analysts polled by Thomson Reuters see profit rising 13% this
year to $1.28 a share. Texas Roadhouse has a three-year
Earnings Stability Factor
of 2, indicating a steady stream of profits.
The company started paying shareholders dividends in 2011 and
has raised its payout each year since. It recently boosted its
dividend by 25% to 15 cents a share. The dividend will be paid
April 4 to shareholders of record March 19. It offers a yield of
about 2.3% at current prices. Texas Roadhouse is only one of two
stocks in the Retail-Restaurant group with an IBD Composite
Rating of 80 or better and producing a yield of 2% or more.
After sliding 21% from its October peak, the stock has been
bouncing back in recent weeks. Volume has been heavy in the
comeback, a sign of professional buying. The stock is forming a
potential base, which would be a first-stage structure. Texas
Roadhouse reset its base count about a month ago.