Investopedia: Starbucks Shows Why It's Starbucks

Alright, Will Ashworth, you win this round! One quarter ago, fellow Investopedia writer Will Ashworth took issue with me seeing limited appreciation potential in Starbucks (Nasdaq:SBUX) and laid out a case that Starbucks was still a good buy. With the stock up about 22% over the last quarter, blowing away other restaurants like McDonald's (NYSE: MCD) and other consumer stocks in general, there's little else for me to do but see where I got Starbucks so wrong and reevaluated where it can go from here.

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Investopedia: Sonic Not Breaking The Sound Barrier With Its Growth

Americans love to eat out and they seem to love store concepts that offer a break from burger-world - witness the growth at concepts like Panera (Nasdaq:PNRA), Chipotle (NYSE:CMG) and Dunkin' Brands (Nasdaq:DNKN). Of course, that's not to say that burger-world is exactly suffering either; McDonald's (NYSE:MCD) has been remarkably and consistently strong and newer concepts like Five Guys are also doing well.

Sonic (Nasdaq:SONC) definitely offers a different concept with its drive-in store format and a menu that offers many foods and drinks that cannot be found at other national or regional QSR chains. So far, though, "different" hasn't really meant better, as Sonic has struggled to deliver really exciting growth over the years.

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Investopedia: Panera Well Off The Value Menu

The restaurant world is increasingly looking like a winner-takes-all market, as nationwide quick service restaurants (QSR) batter locally-owned rivals on price and marketing and the top QSR chains further separate themselves from their rivals. As one of the "Big Three," Panera Bread (Nasdaq:PNRA) is not only seeing strong store traffic growth, but excellent overall profitability.

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Investopedia: Dunkin' Brands Definitely A Hot Cup Of Coffee

Quick service restaurants (QSRs) are hot today, but the stock of Dunkin' Brands (Nasdaq:DNKN) hasn't enjoyed as much of that love. While owners of McDonald's (NYSE:MCD), Yum! Brands (NYSE:YUM), Panera (Nasdaq:PNRA) and Starbucks (Nasdaq:SBUX) have all racked up double-digit gains over the past year, Dunkin' has been an under-performer.

The trouble for Dunkin' stock right now seems to be the trade-off between quality and value. There are a lot of things to like about the business model at Dunkin' Brands, but working off a demanding valuation may keep a lid on outperformance for a little while yet.

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Investopedia: McDonald's Off The Dollar Menu

Combine a worldwide brand with solid execution, good growth, market share expansion, and a healthy dividend and it probably should be no great surprise that the stock is not cheap. Few companies are executing as well as McDonald's (NYSE: MCD) (let alone few restaurant companies), and the stock reflects this. While the company certainly has levers to pull for further growth and is a high-quality name, new investors may want to wait in the hope of a bargain before building a position here.

Juicy Third Quarter Growth 

McDonald's did well for itself in the third quarter. Revenue rose 14% as reported, and 8% on a constant currency basis, as the company saw 5% worldwide comparable sales growth. Comparable store growth was good in the U.S. (helped by a strong September) and surprisingly strong in Europe. Results in Asia were a little disappointing, but still positive.

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Investopedia: Can Arby's Ever Find A Stable Home?

Normally the decision of Wendy's/Arby's Group (NYSE:WEN) to sell off Arby's to a private investment group would not interest me all that much. After all, it's a struggling (and not notably well-run) business selling off a non-core asset that itself has seemingly spent more years struggling than thriving since its founding. 

And yet, there is something interesting about this story that investors in the restaurant sector probably should not ignore. Not only is there is a lesson about the durability of brands, but also just how difficult it is to crack into the rarefied air of those chains that really matter.


The Long Strange Trip of Arby's
There are more than a few weird stories in the annals of restaurants - from flatulent tortoises at Rainforest Cafe (now owned by Landry's), weird animatronics, lawsuits and bankruptcies at CEC Entertainment's (NYSE:CEC) Chuck E. Cheese's, and the mass-market success of Hooters. Nevertheless, Arby's still manages to stand out. 



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