The restaurant enterprise ranges from local mom-and-pop eateries to national and global chains. The industry is notoriously tough for business owners, with about 60% of new restaurants failing within their first year. In this article we will talk top restaurants stocks for Q4 in 2020.
COVID-19 changes anything
One reason for this is that restaurant spending tends to be heavily discretionary, fluctuating dramatically with the broader economy. Restaurants as a group have not fared well during the COVID-19 pandemic.
Many restaurants remain closed to service while millions of consumers confined at home are reluctant to dine out at the ones that are open. Some of the best-known publicly traded restaurants include McDonald’s Corp. (MCD) and Chipotle Mexican Grill, Inc. (CMG).
The restaurant industry, as represented by the Dow Jones US Restaurants & Bars Index, has significantly underperformed the broader market. The index has provided 1-year trailing total returns of -0.1% as compared with the Russell 1000’s total returns of 13.3% as of September 18.
Top 3 Restaurants stocks
Restaurants with successful delivery or takeout operations, however, have done particularly well during this period. That is reflected in the top stocks of the restaurant industry below.
Here are the top 3 restaurant stocks with best value and fastest growth based on investopedia.
Best Value Restaurant Stocks
These are the restaurant stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
The best value restaurants stocks are Denny’s Corp (DENN), Jack In The Box Inc. (JACK), Restaurant brands International Inc (QSR.TO).
Fastest Growing Restaurant Stocks
These are the restaurant stocks with the highest YOY earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
The fastest growing restaurants stocks are Papa John’s International Inc. (PZZA), ack In The Box Inc. (JACK), Wingstop iNC. (WING).
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