Dunkin Brands Group Inc (DNKN), Krispy Kreme Doughnuts (KKD): Save Your Doughnuts for Winter

Summary

With Krispy Kreme, the goal should be to obtain consistent levels of same store growth. Double digit same store growth figures only bring disappointment when they fall to (likely still to be good) single digits. From a price per earnings standpoint, Krispy Kreme is looking rich, but would offer value with a P/E in the mid-30s – comparable to Starbuck’s – which as a mature company is considerably further along its growth cycle. The summer season may see Krispy Kreme lose out to Dunkin Brands Group Inc (NASDAQ:DNKN), but this may leave the stock nicely primed for a move higher once the colder, sugar-fix months of winter roll in.

Declan Fallon has no position in any stocks mentioned. The Motley Fool recommends Starbucks. The Motley Fool owns shares of Starbucks.

The article Save Your Doughnuts for Winter originally appeared on Fool.com.

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