8 Cheap Restaurant Stocks to Buy According to Hedge Funds

2. Dine Brands Global, Inc. (NYSE:DIN)

Forward Price to Earnings Ratio: 5.83

Number of Hedge Fund Holders: 23

Dine Brands Global, Inc. (NYSE:DIN) is an American company that owns and franchises three restaurant chains: Applebee’s Neighborhood Grill + Bar, the International House of Pancakes (IHOP), and Fuzzy’s Taco Shop.

DIN has been focusing on marketing campaigns and value-driven promotions during the holiday season to drive sales. Applebee’s recently entered into a strategic partnership as the official grill and bar of the NFL and launched an advertisement featuring notable players and coaches highlighting its $0.50 boneless wings campaign. Moreover, on Veterans Day in November, it offered free meals to active and retired military officers to honor their service to the nation.

CEO John Peyman acknowledged during the Q3 2024 earnings call on November 6 that Dine Brands Global, Inc. (NYSE:DIN) was pressured by consumer pullback and a high promotional activity environment in the industry. Total consolidated revenue dropped 3.8% during the quarter to reach $195 million, with both Applebee’s and IHOP experiencing a dip in comparable sales. Another factor that contributed to the fall was a decline in franchise and rental revenues. EPS for the quarter stood at $1.28, falling shy of forecasts by six cents.

However, the company’s financial position remained strong. Dine Brands Global, Inc. (NYSE:DIN) ended the quarter with improved liquidity. It finished with total unrestricted cash of $169.6 million, up 10.5% sequentially from the second quarter. DIN also paid $7.8 million in dividends in Q3. According to Insider Monkey’s database for Q3 2024, 23 hedge funds held investments in the company, up from 19 at the end of the second quarter of 2024. DIN is among the top cheap restaurant stocks to buy according to hedge funds.