The restaurant industry is booming despite challenges like rising inflation and interest rates. Consumers are still dining out in full force, leading to surging restaurant sales. For investors looking to capitalize on this trend, here are six restaurant stocks that are particularly appetizing right now.
1. Wingstop (WING) has seen impressive growth thanks to their innovative menu incorporating chicken thighs. With unit growth of 13% and same-store sales up 18% last year, Wingstop’s stock has gained 380% over the past five years.
2. Ruth’s Hospitality Group, Inc. (RUTH), owner of Ruth’s Chris Steakhouse, has managed to stay profitable by passing along higher costs to customers through strategic price increases. With a stock jump of 26% in the last year and 156% over three years, Ruth’s Hospitality offers a dividend yield of 2.98%.
3. Carrols Restaurant Group (TAST), the largest Burger King franchisee in the US, has made strategic changes like removing the Whopper from its value menu. Despite these challenges, Carrols’ stock has risen 228% in the past year.
4. Portillo’s (PTLO) has navigated industry challenges through expansion and investments in technology and staffing. With plans to grow at 10% per year, Portillo’s is well-positioned to capitalize on strong demand for its Chicago-style menu.
5. Dine Brands Global (DIN), parent company of Applebee’s and IHOP, is facing challenges like labor shortages and high food costs. However, smart strategic moves and strong free cash flow suggest Dine Brands can weather these challenges for long-term growth.
6. Yum China Holdings (YUMC) is a powerhouse in the Chinese restaurant industry, operating brands like KFC, Pizza Hut, and Taco Bell. With over 700 new stores opened in 2023, Yum China is poised to capitalize on China’s massive consumer market.
Overall, these six restaurant stocks offer investors a promising opportunity to benefit from the continued growth and resilience of the restaurant industry.
