Dunkin Brands Group Inc (DNKN), The Wendy’s Company (WEN): Hot Food and Hot Growth From Three Restaurant Companies

In July 2013, the company altered its menu by changing the size of wing portions served and increasing the price per wing by 20%. It has also entered into a new distribution agreement which will result in savings of 0.4% to 0.5% in food cost. These changes will lead to a 2% savings in food cost and will improve the company’s overall margins. The restaurant level margin will increase to 18.4% this year and 19.6% next year, as compared to 18.2% last year. The company expects earnings per share to grow 20% annually over next three years through unit expansion and margin improvement.

Conclusion

All three restaurant companies are providing better growth prospects through expansion and innovation. Dunkin Brands Group Inc (NASDAQ:DNKN)’ expansion in the U.S and its new products will drive revenue. The Wendy’s Company (NASDAQ:WEN) image activation will lift sales, and its debt refinancing will lead to ongoing interest savings. Buffalo Wild Wings (NASDAQ:BWLD)’ new openings and margin improvement will drive earnings per share in the long run. As a result, I recommend all three of these stocks as a “buy.”

The article Hot Food and Hot Growth From Three Restaurant Companies originally appeared on Fool.com.

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