) surprised investors Wednesday morning with its announcement that
its same-store sales were weak in July. The Dow, the S&P 500
and the Nasdaq all looked like they might close lower, but only the
Nasdaq did. All because same-store sales at the golden arches fell
0.1 percent in the United States, 0.6 percent in Europe and 1.5
percent in the Asia/Pacific, Middle East and Africa. The company
cited the sluggish global economy for these results.
So is it time to dump McDonald's in favor of some alternative?
Hardly. Here is a look at three restaurant stocks that are doing
well. The share prices of AFC Enterprises (NASDAQ:
), Cracker Barrel Old Country Store (NASDAQ:
) and Papa John's (NASDAQ:
) are all more than 25 percent higher year to date, leading the
industry. All three have had growth in EPS and sales over the past
five years and they are forecast to post EPS growth over the next
five years, and their stocks have outperformed McDonald's over the
past six months.
The share price has risen more than 30 percent in the past six
months. This Atlanta-based operator of the Popeye's Chicken &
Biscuits chain has a market capitalization of more than $540
million. The price-to-earnings (P/E) ratio is higher than the
industry average, but so is the operating margin. The long-term
earnings per share (
) growth forecast is about 12 percent and the return on equity is a
whopping 163 percent. Still, analysts seem to think the stock has
some room to run, as the consensus price target is more than 11
percent higher than the current share price. Over the past six
months, the stock has outperformed competitor Yum! Brands (NYSE:
), which operates the KFC chain and it has outperformed the broader
Cracker Barrel Old Country Store
Cracker Barrel reached a new 52-week high Wednesday, the same
day the company announced the retirement of the chairman. The
purveyor of comfort food and nostalgia has a market cap of about
$1.4 billion. Its P/E ratio is less than the industry average. The
long-term EPS growth forecast is more than 10 percent and the
return on equity is almost 29 percent and the dividend yield is
about 2.5 percent. Five out of eight analysts polled by Thomson
First Call recommend buying the stock. The consensus price target
is about 7 percent higher than the current share price. The stock
has outperformed Denny's (NASDAQ: ) and the S&P 500 over the
past six months.
The share price of this pizza delivery and carryout operator has
pulled back about 7 percent from a recent multiyear high, but it is
still about 39 percent higher year to date. The company is
headquartered in Louisville, Ky., and has a $1.2 billion market
cap. Its long-term EPS growth forecast is about 12 percent, and the
return on equity of more than 27 percent. The forward earnings
multiple is less than the industry average P/E ratio. Short
interest is about 3.5 percent of the float. But note that the
consensus price target on Papa John's is now less than the current
share price. Over the past six months, the stock has outperformed
rival Domino's Pizza (NYSE: ) and the broader markets.
(c) 2012 Benzinga.com. Benzinga does not provide investment advice.
All rights reserved.