Top 10 Restaurant Stocks to Buy Under $20

Page 9 of 9

1. The Wendy’s Company (NASDAQ:WEN)

Share Price: $12.79

Number of Hedge Fund Holders: 33

The Wendy’s Company (NASDAQ:WEN) operates, develops, and franchises a range of quick-service restaurants. It specializes in made-to-order hamburgers, made using fresh beef available in the contiguous US, Canada, and Alaska. It also offers other signature items such as chili, salads, baked potatoes, and the Frosty dessert. The company’s operations are divided into Wendy’s U.S., Wendy’s International, and Global Real Estate & Development. The Wendy’s Company (NASDAQ:WEN) and its franchises have more than 7,000 restaurants across the globe.

Wendy’s Company (NASDAQ:WEN) updated its capital allocation policy in fiscal Q4 2024, announcing a new target dividend payout ratio of 50% to 60% of adjusted earnings. The company’s new capital allocation policy allows it to maximize long-term shareholder value and accelerate growth.

The company’s operations show resilience. Fiscal year 2024 marked the company’s 14th consecutive year of global same-restaurant sales growth. Wendy’s Company’s (NASDAQ:WEN) systemwide sales rose 5.4% in fiscal Q4 2024, reaching $3.7 billion. Total revenues for the quarter were $574.3 million, and adjusted revenues were $459.3 million, an increase of 6.4%. Its adjusted EBITDA also underwent an 8.6% increase, reaching $137.5 million.

In a report released on March 12, Jake Bartlett from Truist Financial maintained a Buy rating on Wendy’s Company (NASDAQ:WEN). Its median price target of $12.79 implies an upside of 27.05% from current levels.

Overall, WEN ranks first among the top 10 restaurant stocks to buy under $20. While we acknowledge the potential of restaurant stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than WEN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.

Page 9 of 9