In this article, we discuss the 5 best fast-food stocks to buy now. If you want to read our detailed analysis of the fast-food stocks, go directly to see the 10 Best Fast Food Stocks to Buy Now.
5. Domino’s Pizza, Inc. (NYSE:DPZ)
Number of Hedge Fund Holders: 31
Founded in 1960, Domino’s Pizza, Inc. (NYSE:DPZ) is an American pizza restaurant chain. The company reported its Q3 results on October 14, posting an EPS of $3.24, beating the estimates by $0.14. The company reported an 8.8% growth in the global composite sales, versus the estimates of 7.69%.
In Q2, 31 hedge funds tracked by Insider Monkey reported having stakes in Domino’s Pizza, Inc. (NYSE:DPZ), up from 29 in the previous quarter. The total value of these stakes is $2.49 billion. Pershing Square is the largest shareholder of Domino’s Pizza, Inc. (NYSE:DPZ) in Q2, with over 2 million shares.
On October 14, Domino’s Pizza, Inc. (NYSE:DPZ) announced a quarterly dividend of $0.94 per share, yielding 0.79%.
Pershing Square Holdings, Ltd. mentioned Domino’s Pizza, Inc. (NYSE:DPZ) in its Q2 2021 investor letter. Here is what the firm has to say:
“In March, PSH initiated an investment in Domino’s Pizza. Domino’s is the number one pizza company in the world and, along with its franchisees, operates more than 18,000 stores globally. As 98% of the system is franchised, the company generates most of its profi ts from high-margin brand royalty fees, and the balance from company-owned stores and a supply chain business that supplies North American franchisees.
We have long admired Domino’s due to its compelling customer value proposition, best-in-class digital infrastructure, consistent track record, exceptional unit economics and world-class management team. Domino’s menu in the U.S. has featured its core $5.99 and $7.99 everyday value platforms for more than a decade, which are amongst the lowest-cost meals for a family of four. The company generates 75% of its sales through digital channels – by far the highest in the industry. Ownership of the leading digital and delivery infrastructure enables Domino’s to consistently deliver an outstanding customer experience as well as attractive economics to drivers, franchisees, and shareholders, all without using third-party delivery providers in the U.S. This strong value proposition and effi ciency have led to consistent same-store sales growth of highsingle-digits in the U.S., and mid-single-digits internationally…” (Click here to see the full text)
4. Yum! Brands, Inc. (NYSE:YUM)
Number of Hedge Fund Holders: 35
In Q2, Yum! Brands, Inc. (NYSE:YUM) presented a positive hedge fund sentiment, as of the 873 hedge funds tracked by Insider Monkey, 35 hedge funds had positions in the company in Q2, up from 32 in the previous quarter. The total value of these stakes is $652.3 million.
Yum! Brands, Inc. (NYSE:YUM) is an American fast-food company that owns KFC, Pizza Hut, Taco Bell, among others. On August 11, the company’s board declared a quarterly dividend of $0.50 per share, yielding 1.49%. The company has a track record of 4 years of consistent dividend growth.
This September, Baird reiterated its Buy rating on the stock, with a $144 price target. Recently, Morgan Stanley named Yum! Brands, Inc. (NYSE:YUM) as one of its top picks in the restaurant sector, while keeping an Overweight rating on the shares.
3. Chipotle Mexican Grill, Inc. (NYSE:CMG)
Number of Hedge Fund Holders: 35
Chipotle Mexican Grill, Inc. (NYSE:CMG) is an American chain of fast-casual restaurants, specializing in Mexican cuisine. The company reported solid Q3 earnings on October 12 and posted an EPS of $7.02, beating the estimates by $0.69. Chipotle Mexican Grill, Inc. (NYSE:CMG) also reported an 80% recovery in in-restaurant sales, compared with pre-pandemic levels.
Recently, Goldman Sachs and Deutsche Bank lifted their price targets on Chipotle Mexican Grill, Inc. (NYSE:CMG) to $2,190 and $1,747, respectively. Since the beginning of the year, Chipotle Mexican Grill, Inc. (NYSE:CMG) delivered a 39% return to shareholders.
At the end of Q2, 35 hedge funds tracked by Insider Monkey reported owning stakes in Chipotle Mexican Grill, Inc. (NYSE:CMG), compared with 41 in the previous quarter. The total value of these stakes is over $3.2 billion.
Ensemble Capital mentioned Chipotle Mexican Grill, Inc. (NYSE:CMG) in its recently published Q3 2021 investor letter. Here is what the firm has to say:
“Chipotle reported their best restaurant-level results since before the foodborne illness outbreak in 2015. Along with raising employee wages, Chipotle raised prices across its menu and saw very little resistance to these price hikes. It held onto 80% of the digital orders it saw during 2020 and its digital orders accounted for nearly 50% of the quarter’s revenue. As a result of its strong momentum, management formally raised its long-term average unit volume target from $2.5 million to $3 million and hinted it could go even higher. Chipotle continues to roll out more Chipotlane drive-thru locations, which generate higher sales and returns on invested capital versus non-Chipotlane stores, while offering customers a more convenient pickup option. They also noted they are pushing forward with international expansion plans. The stock was up 19% in the third quarter and is up 34% year to date.”
2. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 63
Starbucks Corporation (NASDAQ:SBUX), an American coffeehouse chain, increased its quarterly dividend by 9% on September 29, at $0.49 per share, yielding 1.75%.
The number of hedge funds tracked by Insider Monkey reported having stakes in Starbucks Corporation (NASDAQ:SBUX) grew to 63 in Q2, from 61 in the previous quarter. The total value of these stakes is $4.75 billion, up from $4.44 billion in Q1. Fundsmith LLP was the largest shareholder of Starbucks Corporation (NASDAQ:SBUX) in Q2, owning shares worth $1.2 billion.
In October, BofA reinstated its coverage on Starbucks Corporation (NASDAQ:SBUX) with a Buy rating and a $135 price target.
Polen Capital mentioned Starbucks Corporation (NASDAQ:SBUX) in its Q2 2021 investor letter. Here is what the firm has to say:
“For Starbucks, we believe the underlying businesses for the company remain strong. Starbucks has grappled with the impact of the pandemic, but results have continued to show an ongoing post-pandemic recovery.”
1. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 66
McDonald’s Corporation (NYSE:MCD) was one of the very first fast-food chains to rebound from the pandemic, with sales surpassing pre-pandemic levels. On September 27, the fast-food chain announced to increase its dividend by 7% at $1.38 per share, yielding 2.23%.
Recently, Wells Fargo lifted its price target on McDonald’s Corporation (NYSE:MCD) to $274, with an Overweight rating on the shares, ahead of the company’s Q3 results. In 2021, the stock gained 12.9%.
Arrowstreet Capital was the largest shareholder of McDonald’s Corporation (NYSE:MCD) in Q2, owning over 2.1 million shares. In addition, 66 hedge funds tracked by Insider Monkey have stakes in the company in Q2, compared with 67 in the previous quarter. The total value of these stakes is over $2.7 billion.
You can also take a look at 10 Best Restaurant Stocks To Buy and Top 10 Restaurant Stocks Under $10.
