10 Best Hospitality Stocks to Buy According to Hedge Funds

3. Texas Roadhouse, Inc. (NASDAQ:TXRH)

Number of Hedge Fund Investors: 52

Texas Roadhouse, Inc. (NASDAQ:TXRH) was established in 1993 and is a popular family-friendly casual dining establishment. Over 750 outlets are run by the restaurant chain and its franchises. Although the company has expanded internationally, the majority of its restaurants are located in the United States.

The restaurant business is challenging, particularly in light of rising labor, food, and insurance expenses. Nonetheless, Texas Roadhouse, Inc. (NASDAQ:TXRH) is one of the companies best equipped to handle those challenges. It pays dividends to stockholders, has a strong profit margin, and has an excellent management team.

The company expanded in 2024 despite a challenging economic situation. In 2024, Texas Roadhouse, Inc. (NASDAQ:TXRH) recorded historic revenue growth, totaling over $5.4 billion, with average unit volume exceeding $8 million for the first time in company history. A 4.4% YoY increase in traffic was the primary driver of an 8.5% increase in same-store sales. Profits per share increased by 42.5%, and operating cash flow topped $750 million.

Texas Roadhouse, Inc. (NASDAQ:TXRH) increased its network by launching 31 company-owned restaurants and 11 overseas franchise sites, with plans to add 30 more in 2025. A $500 million share repurchase program and an 11% dividend increase were also announced, which improved shareholder returns. The firm also progressed its digital transformation by improving guest management and kitchen efficiency.