Why Panera Bread Co (PNRA) Seems Better Than McDonald’s Corporation (MCD) and Yum! Brands, Inc. (YUM)

A massive growth trigger for Panera Bread is its recent introduction of pasta dishes. The idea of their integration with Panera’s existing menu may seem uneventful, but the fact is it would attract consumers with continental preference. Additionally, Panera Bread’s revenue collections are the weakest during dinner hours, primarily due to its limited food offerings. But with the rollout of pasta dishes, the café chain would have something else to offer than its typical sandwiches. Analysts estimate that this launch has the potential to increase Panera’s earnings by 5-7%.

Investor’s Delight

Panera also has a $600 million share-buyback program underway, which was announced in August last year. During the recent quarter, the company repurchased $20 million worth of its shares, which leaves $560 million under its authorized capital. Since Panera has repurchased only a fraction of its planned share buybacks over the last year, it is quite possible that the company accelerates its share buybacks in the coming quarters to make room for its buyback programs in the future. Its management has projected an annual EPS boost of $0.05 due to its pending share buybacks.

Conclusion

Although shares of Panera Bread Co (NASDAQ:PNRA) have risen by nearly 20% over the last year, its growth prospects suggest that there is still plenty of upside. According to analyst consensus, the annual EPS of Panera Bread should grow by nearly 16% and 20% over a one-year and five-year time frame, respectively. Keeping all the mentioned reasons in mind, I believe that Panera Bread could prove to be a great investment.

The article Why Panera Bread Seems Better Than McDonalds and Yum! Brands originally appeared on Fool.com and is written by Piyush Arora.

Piyush Arora has no position in any stocks mentioned. The Motley Fool recommends McDonald’s and Panera Bread. The Motley Fool owns shares of McDonald’s and Panera Bread. Piyush 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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