Displaying items by tag: fast food

(New York)

The stock market is a minefield right now. A lot of stocks have taken big hits. Some have rallied too much, others still have further to fall. There will be further unpredicted consequences of the COVID economy, so the future is not clear for many stocks. So, where to put money? Here is a suggestion—a down and out, beaten up, but promising fast food stock. Take a look at Restaurant Brands (ticker: QSR), which owns Popeyes, Tim Horton, and Burger King. Shares are down 28% since the end of February, and it has stable earnings and plenty of cash on hand to handle expenses. Popeyes is seeing a return to sales growth while Burger King has suspended its COVID-related fall and is starting to move back to normalcy.

FINSUM: We like this stock because fast food chains are likely to hold up well during the recession. The food is cheap and the restaurants are almost tailor made for COVID (i.e. they already have drive-through).

(New York)

With the Fed coming in less dovish than expected this week, there is suddenly much more anxiety in the market. Without a clear direction on rates, and with lingering worries about the economy, the outlook for stocks and bonds is not clear. And as we all know, markets hate uncertainty. Accordingly, the search for the best recession-proof stocks continues, and we have a new proposal today: fast food stocks. As consumer spending falls in a recession, bargain-providing companies, like fast food, often do well. The sector also provides healthy dividends. Take a look at the usual suspects: McDonalds, Wendy’s, and Chipotle, and some you may not have thought of, like Cracker Barrel and Restaurant Brands International.

FINSUM: The “Dollar menu” suddenly becomes very attractive to the American consumer when times start getting tough. These stocks seem a good bet, especially because they have solid dividends, which should provide some protection in case a downturn doesn’t happen.

(Chicago)

McDonalds has been slowly reinventing itself over the last few years. Big menu changes and and healthier items have been a major part of that shift. Now the restaurant chain is doubling down on one its recent focus areas—breakfast. A few years ago McDonalds decided to make a handful of breakfast items available all day. The change was a hit with customers and investors and helped grow sales for the year. However, recently, McDonalds has blamed it for slowing sales as its morning business has actually weakened because consumers can get breakfast items all day. Now it is changing its tact by offering breakfast sandwiches starting at just a Dollar and offering extra-meat breakfast sandwiches all day.

FINSUM: It seems all day breakfast has cannibalized some sales for old Mickey D’s. The dollar menu approach in the morning should help.