The Wendy’s Co (WEN): Should You Buy This Stock?

Not the only new menu

Burger King Worldwide Inc (NYSE:BKW) recently announced its new summer menu. Hoping to build on the success of last year’s menu, the company announced 13 new summer menu items. The new items include a variety of barbecue-themed items and frozen treats. The company feels that the barbecue items work well with the “flame broiled” approach to cooking. The company needs the menu to perform strongly as first-quarter revenue dropped by over $200 million to $327.7 million and EPS missed analysts expectations.

Buy the bun?

It is clear from Yum! Brands, Inc. (NYSE:YUM) that one product, a simple twist on a classic, can have a huge impact on a restaurant’s financials. Wendy’s pretzel burger is something not readily available in the quick-service restaurant market, and if the testing at Wendy’s is accurate, it could be a huge hit with customers.

In a market where same-store sales growth has been largely flat, success similar to Yum! Brands could mean a boom for The Wendy’s Co (NASDAQ:WEN) shareholders and to a greater extent than Yum! Brands. Yum! has a large portfolio of restaurants, so the success of Taco Bell could only do so much for the stock. Wendy’s only operates Wendy’s franchises, so the success of the products could drive the stock. On the other hand, while Burger King Worldwide Inc (NYSE:BKW)’s summer menu is appealing, it is a seasonal menu and the benefits, if any, will only be reaped for a quarter or two.

I would avoid Burger King Worldwide Inc (NYSE:BKW) stock and take a close look at The Wendy’s Co (NASDAQ:WEN) and the bun that could juice up the business.

The article Should You Buy This Stock? originally appeared on Fool.com and is written by John Timmes.

John Timmes has no position in any stocks mentioned. The Motley Fool recommends Burger King Worldwide. John is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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