Chipotle Mexican Grill, Inc. (CMG): This Mexican Grill Is A Good Buy Today

Comparatively larger, Florida based Darden Restaurants, Inc. (NYSE:DRI) trades at $50 and has a market capitalization of about $7 billion. It operates full service restaurants in the United States and Canada. It operates restaurants under different brand names like Red Lobster, Olive Garden, LongHorn Steakhouse, The Capital Grille, Bahama Breeze, Seasons 52, Eddie V’s Prime Seafood, and Wildfish Seafood Grille. In 2012, it owned and operated approximately 2,000 restaurants.

Comparison with Competitors

New Restaurants opened: During the year 2012, Chipotle opened 180 new Mexican grill restaurants in the US whereas Qdoba (Jack in the Box) opened 78 new restaurants (46 Company owned and 32 franchise owned) and Taco Bell (Yum Brands) opened around 25 units in the United States.

Net Income increase: For Yum! Brands, Inc. (NYSE:YUM), net income increased 21% from $1.319 billion in 2011 to $1.597 billion in 2012. Chipotle’s net income increased 19.7% in 2012 whereas for Jack in the Box Inc. (NASDAQ:JACK) there is an increase of 13.6% in net income in 2012.

Margins:

As seen from the table, Chipotle has better margins than Jack in the Box and its margins are comparable with Yum! Brands, Inc. (NYSE:YUM).

Conclusion

Chipotle Mexican Grill, Inc. (NYSE:CMG) is the market leader in the Mexican fast casual restaurant industry with over $2 billion in sales which accounts for nearly 15% of the industry. Chipotle is one of the fastest growing public restaurants with an average growth of 14% over the past five years. Chipotle’s future growth outlook is positive as it is expanding operations by opening around 165 to 180 restaurants in 2013. Chipotle is also planning to roll out a new catering business in 2013. Chipotle’s ability to produce better food and its efficient operations has led to its growth. Chipotle is a buy for the long term. Recently, UBS has also raised the rating of Chipotle Mexican Grill to buy from neutral.

Shas Dey has no position in any stocks mentioned. The Motley Fool recommends Chipotle Mexican Grill. The Motley Fool owns shares of Chipotle Mexican Grill and Darden Restaurants, Inc. (NYSE:DRI).