Five restaurant stocks to explore as customers return to markets

The restaurant industry comprises various businesses, from local diners, cafes to international eatery chains. These companies are typically dependent on consumer spending and the country’s economic health. The recent US GDP data indicated a sustained economic recovery, although the delta virus infections have been a concern.

Here we look at the performance of five restaurant stocks amid a topsy-turvy market environment.

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McDonald's Corporation (NYSE: MCD)

McDonald's is an Illinois-based food company and operates globally.

The stock of the company was priced at US$237.63 at 11:54 am ET on August 27, up 0.29 percent compared to its previous close. The stock value of MCD rose 12.72 percent YTD.

The company has a market cap of US$177.47 billion, a P/E ratio of 25.86, and a forward P/E one year of 26.45. Its share volume on August 26 was 2,008,052.

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Its highest and lowest stock prices for the last 52 weeks were US$247.05 and US$202.73. Its EPS is US$9.19.

The consolidated revenue of the company rose by 57 percent YoY to US$5.88 billion in Q2, 2021, compared to US$3.76 billion in the year-ago quarter. Its operating income came in at US$2.69 billion compared to US$961.1 million in the same quarter of the previous year.

The net income of the company was US$2.21 billion, or US$2.95 per diluted share in the quarter ended June 2021, compared to US$483.8 million, or US$0.65 per diluted share in Q2, 2020.

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Yum! Brands, Inc. (NYSE: YUM)

Yum! Brands is a Kentucky-based fast-food company that operates through a franchise system.

The stock of the company was priced at US$132.56 at 12:10 pm ET on August 27, up 0.88 percent compared to its previous close. The stock value of YUM rose by 24.17 percent YTD.

The company has a market cap of US$39.12 billion, a P/E ratio of 30.36, and a forward P/E one year of 29.66. Its share volume was 1,541,801 on August 26.

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The highest and lowest prices of the stock in the last 52 weeks were US$135.77 and US$88.08. Its EPS is US$4.36.

The total revenue of the company surged by 34 percent YoY to US$1.60 billion compared to US$1.19 billion in the year-ago quarter. Its total costs and expenses came in at US$1.03 billion in Q2 of fiscal 2021, compared to US$898 million in the same quarter of the previous year.

Its operating profit rose by 89 percent YoY to US$567 million. The net income of the company was US$391 million, or US$1.29 per diluted share, compared to US$206 million, or US$0.67 per diluted share in Q2, 2020.

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Restaurant Brands International Inc. (NYSE: QSR)

Restaurant Brands International is headquartered in Oakville, Canada, and operates as a quick-service restaurant or QSR company.

The stock of the company was priced at US$64.615 at 12:35 pm ET on August 27, up 0.69 percent compared to its previous close. The stock value of QSR rose by 8.05 percent YTD.

Its market capitalization is US$19.93 billion, the P/E ratio is 29.51, and forward P/E one year is 22.84. The earnings per share are US$2.19.

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The highest and lowest prices of the stock in the last 52 weeks were US$71.12 and US$51.12. Its share volume on August 26 was 1,491,658.

The total revenue of the company in Q2 of fiscal 2021 were US$1.43 billion compared to US$1.04 billion in the year-ago quarter. Its adjusted EBITDA was US$577 million compared to US$358 million in the same quarter the previous year.

The net cash provided by operating activities came in at US$745 million in Q2, 2021. Its net income attributable to common shareholders was US$390 million, or US$0.84 per diluted share, compared to US$163 million, or US$0.35 per diluted share, in the prior year's quarter.

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BBQ Holdings, Inc. (NASDAQ: BBQ)

BBQ Holdings Inc. is based in Minnesota and owns and manages barbecue restaurants in the US.

The stock of the company was priced at US$14.67 at 1:33 pm ET on August 27, up 0.82 percent compared to its previous close. The stock value of BBQ jumped 197.16 percent YTD.

Its market cap is US$151.95 million, and its P/E ratio is 10.12. Its share volume was 19,308 on August 26.

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The highest and lowest price of the stock in the last 52 weeks were US$19.75 and US$3.11. Its EPS is US$1.45.

The net income of the company in Q2 of fiscal 2021 was US$15.78 million or US$1.64 per diluted share, compared to a net loss of US$6.25 million, or US$0.68 per diluted share, in the year-ago quarter. Its adjusted EBITDA was US$5.1 million compared to a loss of US$1.1 million in Q2, 2020.

The company has raised its revenue forecast for FY21 to a range of US$183 million to US$188 million from its previous forecast of US$180 million to US$185 million.

It also raised its net income projection to around US$20.6 million to US$21.0 million from its previous forecast of US$5.1 million to US$5.5 million.

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Fat Brands Inc. (NASDAQ: FAT)

Fat Brands is a California-based company and operates through a chain of franchise restaurants. The company manages various fast-casual and casual dining restaurants.

The stock of the company was priced at US$11.4906 at 1:54 pm ET on August 27, up 3.15 percent compared to its previous close. The stock value of FAT advanced 96.82 percent YTD.

The company has a market cap of US$185.37 million, and a forward P/E one year of -27.85. Its share volume on August 26 was 57,328. Its highest and lowest stock prices in the last 52 weeks were US$15.99 and US$4.30, respectively. Its EPS is US$-1.37.

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The total revenue of the company in Q2, 2021, increased by 167 percent YoY to US$8.3 million, compared to US$3.1 million in the year-ago quarter. Its adjusted EBITDA was US$2.1 million, compared to a loss of US$0.4 million in Q2, 2020.

The company reported a net loss of US$5.9 million, or US$0.48 per diluted share, in Q2 of fiscal 2021, compared to a net loss of US$4.3 million, or US$0.36 per diluted share in the same quarter of the previous year.

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Bottom Line:

The Dow Jones Restaurants & Bars gave a 28.24 percent return over the past year. Since the restaurant sector is dependent on consumer spending, it suffers when there is a major economic disruption due to events like the covid pandemic as people lose income for discretionary spending. However, economists are hopeful of a smooth economic recovery as vaccinations gain pace.