Krispy Kreme Doughnuts (KKD), Einstein Noah Restaurant Group, Inc. (BAGL): Look to the Humble Donut for Big Value

Regarding the competition, Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL) posted fairly decent figures in 2007-2009, but they haven’t been growing earnings as impressively as Krispy Kreme Doughnuts (NYSE:KKD) in the period since then. From 2010 to 2012 they grew earnings from $0.68 to $0.95, and the expected 3-5 year growth rate of -3.8% pales in comparison. Dunkin has posted pretty solid growth over the last few years, but I’m not too bullish on them due to their high valuation.

Bottom line

All in all, Krispy Kreme Doughnuts (NYSE:KKD) appears to be a severely undervalued food company. With solid earnings that have been on the increase as of late, the company has turned things around, and expectations are that these will increase even more over the next few years. In any case, the stock is trading at lower multiples than that of some of the competition, and certainly lower than the overall industry. If you’re looking for great value in a simple product, this is it. As the stock has had such a good run recently, however, investors would probably be well advised to wait for a pullback before getting in.

The article Look to the Humble Donut for Big Value originally appeared on Fool.com and is written by Daniel James.

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