Panera Bread Co (PNRA), Starbucks Corporation (SBUX): This Stock Should Continue to Power Higher

Alternative #2: Dunkin’ Brands

Dunkin Brands Group Inc (NASDAQ:DNKN) operates Dunkin’ Donuts and Baskin Robbins locations worldwide. Since going public again in 2010, Dunkin’ Brands is up 53%, beating the S&P 500’s total return of 31%.

Dunkin’ spent years closing locations and getting its business in order to prepare for an expansion back into the same markets it exited. That time of expansion has come. Dunkin’ has headed west again to fill the country with donuts, coffee, and ice-cream. This growth has allowed Dunkin’ Brands to outperform the broader market and should allow the company to continue such strong performance going forward. Keep in mind that it is just now starting to re-open in California. Successfully growing back into California alone would propel the stock higher.

Need an extra incentive? How about the 1.80% dividend yield that Dunkin Brands Group Inc (NASDAQ:DNKN) provides while it continues its regrowth? That comes close to the 2% dividend that the SPY is giving you right now and while also providing a business that has a heck of a lot bigger growth opportunity.

Bottom line

Panera Bread Co (NASDAQ:PNRA) has been consistent for a long time. Starbucks and Dunkin’ Brands have started to come back in a big way over the past few years. All of these stocks have growth potential ahead of them. Panera and Dunkin’s growth will likely be more organic. Starbucks Corporation (NASDAQ:SBUX) will still have organic growth in other parts of the world, but is also expanding through acquisitions domestically.

I like all three of these companies. They all trade at premium P/E’s, so a pullback would be nice. The long-term outlook for all is positive.

Dave Zaegel has no position in any stocks mentioned. The Motley Fool recommends Panera Bread and Starbucks. The Motley Fool owns shares of Panera Bread and Starbucks. Dave is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article This Stock Should Continue to Power Higher originally appeared on Fool.com and is written by Dave Zaegel.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.