In this article, we’ll take a look at the 11 best restaurant stocks to buy today. If you want to see some more of the stock, head over to 5 Best Restaurant Stocks to Buy Today.
According to the National Restaurant Association’s 2022 State of the Restaurant Industry report, total foodservice industry revenues are expected to reach $898 billion this year, surpassing pre-pandemic levels. However, the restaurant industry must overcome challenges related to rising inflation, rising interest rates, supply chain disruptions and labor shortages to meet rising demand. About 70% of fast-serve, self-service and quick-service restaurants reported problems with hiring and retaining workers. The restaurant industry added 1.7 million new employees to its workforce in 2021, bringing the total number to 14.5 million employees. Despite this development, many companies were understaffed. By the end of 2022, the foodservice industry is expected to expand by an additional 400,000 workers to make up for the labor shortage.
Numerous trends are emerging in the food service industry. Some of the best restaurant stocks, such as McDonald’s Corporation (NYSE:MCD), Starbucks Corporation (NASDAQ:SBUX), and Domino’s Pizza, Inc. (NYSE:DPZ), have focused on downsizing their front-of-the-house operations and increasing kitchen space to meet rising demand for off-premise dining. Restaurants that offer online ordering services have emphasized that the online channel contributes 34% to their sales. Another element driving the industry’s growth is the rising cafe culture alongside the accessibility of healthy fast food options. In addition, the adoption of advanced point of sale and inventory management software has now become mainstream.
Best restaurant stocks to invest in
Photo by S O C I A L . C U T on Unsplash
To shortlist the best restaurant stocks, we looked at these companies’ growth strategies in line with emerging industry trends. The analyst ratings and the company fundamentals were also discussed. We used Insider Monkey’s database of 895 hedge funds as of Q2 2022 to rank these stocks.
11. Portillo’s Inc. (NASDAQ:PTLO)
Portillo’s Inc. (NASDAQ:PTLO) is a fast-casual restaurant chain based in Oak Brook, Illinois.
Experts believe that Portillo’s Inc. (NASDAQ:PTLO) operates in the white space and allows the restaurant to sell its products to its loyal customer base. The company is considered to be in the early stages of growth. Portillo’s Inc. (NASDAQ:PTLO) has set a target growth rate of 10% per year for new unit construction, with the goal of creating a footprint of 600 domestic restaurants.
Despite the economic uncertainty, the restaurant’s comparable store sales were healthy in the second quarter of 2022. Sales increased by 7% year-on-year, while same-store sales increased by 1.9%. In August, Baird’s David Tarantino raised the stock’s price target from $22 to $30 and maintained an Overweight rating. To improve staff performance, Portillo’s Inc. (NASDAQ:PTLO) continues to practice techniques such as providing fringe benefits and career development programs. The analyst believes productivity gains are expected to boost Portillo’s Inc. operating results. (NASDAQ:PTLO).
10. Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH)
Number of hedge fund holders: 13
Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) is a New Orleans, Louisiana-based operator of more than 150 steakhouses in North America.
The restaurant offers a fine dining experience that is experiencing pent-up demand as people turn to experiential dining experiences following the COVID-19 pandemic. Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) is known for delivering consistent taste and customer experience. On September 22, Joshua Long joined Stephens to cover Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) stocks with a target price of $22 and an Overweight rating. The analyst called the stock an attractive growth story within the fine-dining restaurants category.
Analysts think Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) has strong brand equity with its customers and is in a position to deliver long-term low-single digit comparable store sales and mid-single digit unit growth. The stock also offers an annual dividend yield of 2.7% as of October 31.
Of the 895 hedge funds in Insider Monkey’s database, Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) as of the second quarter of 2022 owned by 13 hedge funds.
9. Wingstop Inc. (NASDAQ:WING)
Number of hedge fund holders: 20
Wingstop Inc. (NASDAQ:WING) is an airline-themed restaurant chain based in Garland, Texas.
Following the company’s Q3 2022 results, Wedbush’s Nick Setyan raised the target price for Wingstop Inc. (NASDAQ:WING) from $157 to $177 and repeated an Outperform rating. The analyst stressed that the company’s Q3 results were well above expectations. Wingstop Inc. (NASDAQ:WING) saw its revenue rise 40.9% year-over-year to $92.67 million. Meanwhile, adjusted earnings per share registered at 45 cents, as opposed to the analysts’ forecast of 36 cents. Analysts expect Wingstop Inc. (NASDAQ:WING) will experience margin expansion going forward and continue its growth trajectory.
Polen Capital discussed its optimistic outlook for Wingstop Inc. (NASDAQ:WING) in its Q3 2022 investor letter. Here’s what the company said:
“The absolute top contributors to portfolio performance during the quarter were Wingstop Inc. (NASDAQ:WING), The Trade Desk, and Paycom.
Wingstop, a franchise chain of chicken wing restaurants, performed best during that period. The company reported better-than-expected results, highlighted exciting progress around international growth and announced its intention to launch a chicken sandwich nationally. After a recent visit to headquarters, we believe there is a lot of tailwind for the business, despite the deteriorating consumer outlook.”
8. Dine Brands Global, Inc. (NYSE:DIN)
Number of hedge fund holders: 25
Dine Brands Global, Inc. (NYSE:DIN) is a Glendale, California-based full-service dining company that offers Applebee’s Grill & Bar and IHOP.
The shares of Dine Brands Global, Inc. (NYSE:DIN) have a dividend yield of 2.8% as of October 31. Experts believe that the brands under Dine Brands Global, Inc. (NYSE:DIN) are supported by strong demand. Applebee saw comparable store sales growth of 1.8% in the second quarter of 2022, while IHOP posted a 3.6% increase.
In a research note issued Sept. 6, CL King’s Todd Brooks resumed coverage of Dine Brands Global, Inc. (NYSE:DIN) stock with a target price of $84 and a buy rating. Brooks emphasized that the average unit volume of the company’s two brands is moving in a positive direction. Analysts believe that Dine Brands Global, Inc. (NYSE:DIN) is undervalued as it currently trades at 12.0x earnings, compared to its historical valuation of 14.2x earnings. Dine Brands Global, Inc. (NYSE:DIN) is one of the best restaurant stocks because it has economies of scale across all of its brands.
Simcoe Capital Management has acquired its stake in Dine Brands Global, Inc. (NYSE:DIN) up 30% in the second quarter of the year.
7. Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY)
Number of hedge fund holders: 31
Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) is a Dallas, Texas-based company that provides entertainment and dining experiences in the same location. The company combines a full-service restaurant with an arcade at all of its locations, providing an opportunity to capture a larger portion of consumer food and entertainment spending through its 140 locations across the US.
Compared to the P/W range of 14.1x and 32.6x from 2015 to 2019, Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) is currently trading at approximately 12.1x P/E from next year’s projections. Experts believe that current multiples are an entry point for potential investors as the company is attractively valued and at the low end of its multiples range. Second quarter 2022 results showed that Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) is benefiting from its growing outlets. The company’s second-quarter revenue rose a whopping 24.1% from pre-pandemic levels in the first quarter of 2019.
Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) is also aggressively pursuing international expansion as it plans to open 11 new units in Saudi Arabia, the United Arab Emirates (UAE) and Egypt. The company has partnered with Abdul Mohsen Al Hokair Holding Group to expand into the Middle East and North Africa markets.
As of the second quarter of 2022, 31 hedge funds reported that they had a stake in Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY).
6. Darden Restaurants, Inc. (NYSE:DRI)
Number of hedge fund holders: 32
Darden Restaurants, Inc. (NYSE:DRI) is an Orlando, Florida-based operator of multiple restaurant brands at 1,850 locations. The company claims it receives 400 million guests annually.
In a note issued Oct. 6, Eric Gonzalez of KeyBanc increased the target price for Darden Restaurants, Inc. (NYSE:DRI) from $136 to $150 and maintained an Overweight rating. The analyst revised the target price after meeting with the company’s leadership team in Orlando, Florida. Gonzalez believes the portfolio of Darden Restaurants, Inc. (NYSE:DRI) is in a better position than its competitors as the brands are affordable and have focused heavily on improving their products over the past two years. In Q1 FY23, Darden Restaurants, Inc. (NYSE:DRI) reported quarterly revenue of $2,446 million, up 6% from the same time a year earlier. This was fueled by 34 new restaurant openings during the period and a 4.2% increase in same-store sales. Darden Restaurants, Inc. (NYSE:DRI) has some of the best data insights in the industry and a detailed strategic planning process to improve operational efficiency.
In addition to Darden Restaurants, Inc. (NYSE:DRI), also includes stocks such as McDonald’s Corporation (NYSE:MCD), Starbucks Corporation (NASDAQ:SBUX), and Domino’s Pizza, Inc. (NYSE:DPZ) among the leading stocks. in the hospitality industry.
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Revelation. No. 11 Best Restaurant Stocks To Buy Today was originally published on Insider Monkey.
Since 1950, the S&P 500 index has fallen 20% or more on 12 separate occasions. The average fall in the stock price is -33.38% and the average duration of a stock market crash is 342 days. However, and crucially, the bull markets that follow these crashes tend to be strong and last much longer.
What stock is safest to buy?
Dividend aristocrats, which are companies that have increased dividends for at least 25 consecutive years, are considered safe stocks.
- Berkshire Hathaway. Berkshire Hathaway (NYSE:BRK. …
- The Walt Disney Company. …
- Vanguard High Dividend ETF. …
- Proctor & Gamble. …
- Vanguard Real Estate Index Fund. …
- Starbucks. …
What is the safest investment if the stock market crashes? When you invest in bonds, you are lending money to a company or government. In exchange for this loan, the borrower agrees to pay you interest payments until the bond matures. Bonds are considered safe investments because they are not as volatile as stocks. Open and fund a brokerage account and trade commission-free.
Is the stock market improving 2022?
Survey respondents expect the S&P 500 to rise to 4,335 in the coming year, compared to 3,873.33 when the survey ended on September 16, 2022. Experts prefer US stocks over international markets, but are divided on demand whether value or growth will outperform.
How much has the stock market fallen in 2022? The tech-heavy Nasdaq 100 is down nearly 33 percent so far in 2022, the Dow Jones Industrial Average lost more than 20 percent, while the world’s best-known cryptocurrency, Bitcoin, lost nearly 60 percent of its value.
What is the expected market return for 2022? As of December 31, 2021, the consensus estimates, according to Factset, for 2021, 2022 and 2023 were $204.95, $223.46 and $245.01. As of February 10, 2022, they are $207.79, $224.89 and $247.53. There is no guarantee that a Portfolio will achieve its investment objective.
Are any restaurants publicly traded?
234 Some of the best-known publicly traded restaurants are McDonald’s Corp. and Chipotle Mexican Grill Inc. The restaurant industry, represented by the Dow Jones U.S. Restaurants & Bars Index, outperformed the broader market with a total return of -7.3% over the past 12 months, as of September 15, 2022.
Is Chick fil a publicly traded company? Chick-fil-A is a privately held family business and does not offer stock options to the public. If you are interested in investing in Chick-fil-A by applying to become a franchise owner/operator, please visit our franchise page to learn more about opportunities in the US, Canada and Puerto Rico. Was this answer helpful?
Do restaurants have stock? (NYSE: EAT), Starbucks Corporation (NASDAQ: SBUX), and Texas Roadhouse, Inc. (NASDAQ: TXRH), Domino’s Pizza, Inc. (NYSE: DPZ) is one of the best restaurant stocks to invest in. Stewart Asset Management LLC recently released its second quarter 2021 investor letter, listing Domino’s Pizza, Inc.
Which fast food companies are publicly traded?
Who are the 5 largest food companies?
The World’s Largest Food and Beverage Companies by 2022 Nestle S.A. PepsiCo, Inc. Coca Cola Co. The list is complemented by other major food companies, including Tyson Foods, JBS and Kraft-Heinz.
Who is the largest food company in the US? The largest food companies in the US are: 1) Archer Daniels Midland with revenue of $85.3 billion in 2021, 2) PepsiCo with revenue of $74.5 billion in 2021, and 3) Tyson Foods with revenue of $47 .0 billion in 2021.