5 Fast Food Stocks for Your Portfolio
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For those of you who, like me, simply love the taste of a great cheeseburger and fries, or could eat pizza for any meal during the week. Here are 5 fast food stocks that may not only hit the spot when your feeling the craving for that juicy burger, but may be considered for long term investment growth. You may be thinking "Fast food? Why on earth would I want to invest in an industry that gets so much criticism and blame for the weight problems in our great nation?" The answer is simple, supply and demand. If I like it and the kids will eat it, I'm a single father, I'm buying it! With fast food joints on corners and intersections all across the United States, it's a given. People are buying it or they would not be there. Anywhere there is a demand, that means there is money to be made.
Burger King World Wide Holdings Inc (NYSE: BKW) soars back into the market after a month of trading. Opening on June 20th at a price of $14.50, and currently at a price of $15.62. BKW is the second largest fast food burger chain in the world. They serve 11 million customers at over 12,000 locations in 76 countries world wide. BKW has been recognized as one of the top 3 industry-changing advertisers within the last 30 years, and was listed by Interbrand on it's list of 100 top Best Global Brands. This steady climb is good news for investors, and an excellent time to get in on the ground floor of an investment with potential for great long term growth.
McDonald's Corp (NYSE: MCD) is around $8 above its 52 week low of $81.40, at a current price per share of $89.35. They have an annual dividend of $2.80 per share. With a 20.26% profit margin and a five year earning growth of 18.13% this stock has great potential. MCD is the largest fast food burger company in the world serving customers at over 33,000 locations in over 119 countries. They do an excellent job at appealing to younger customers which will translate into life long commitment to their brand. MCD serves around 68 million people world wide daily, and would be a profitable addition to a long term portfolio.
While Burger King World Wide Holdings Inc and McDonald's Corp are each their own brand, Yum! Brands Inc (NYSE: YUM)focuses on the power of many. With Brands like KFC, Pizza Hut, A & W, Long John Silvers, and Taco Bell, it would be really hard to ignore the competition or the earning power of such a unique company. With a current price per share of $63.98 Yum! Brands Inc seems very under priced. They pay an annual dividend of $1.14 per share and have a five year earnings growth of 13.42%. YUM is the largest restaurant company in the world with 30,000 locations in 100 countries, and they sell pizza!
Who doesn't remember, "Hey! Where's the beef?" I find myself asking the same question when visiting the local hamburger joint. The Wendy's Co (NASDAQ: WEN) has cut back in a lot of ways over the last few years, from trimming back burgers to trimming back unprofitable locations, and even selling off ownership of the Arbys part of the company. For many years Dave Thomas lead the company to be one of the best investments in the fast food restaurant industry. They fell off huge in stock price in 02 and struggled back to only have the stock further plummet from 07 through 08. The question to ask is, with all the strategic positioning to regain strength, have they structured the company in a way to offset the rising inputs that will be brought on by the drought? The stock price is slowly rising. This could be a risky investment, but if they can weather the storm so to speak, they would be a viable long term stock.
While YUM! Brands has one of the most popular pizzas around with Pizza Hutt, there is one I prefer hands down while watching a sporting event on tv or at the stadium and that is Papa John's! Papa John's International Inc (NASDAQ: PZZA) has an excellent product and customer service rating, the highest score ever by an individual brand in the Limited Service Restaurant category from the 2012 American Customer Satisfaction Index. They dipped somewhat in the recession but have came back stronger than ever. They operate in all 50 states and have locations in 33 countries. With a dedication to high quality inputs and customer service, PZZA would be a great addition to any investment portfolio!
If you trust a company enough to eat their food and provide you with a service, why not trust those companies with your investment dollars? I firmly believe that investing in products and services that you personally know and love is a great way to grow wealth over a long period of time. Like Warren Buffett says."Buy what you know."
TSDavis75 has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Burger King Worldwide, McDonald's, and Yum! Brands. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
