Top 5 Restaurant Stocks to Buy Now!
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Today I share with you the top 5 restaurants stocks to buy now IMO. These 5 restaurant stocks will likely make it through RONI Rona and see their stock prices go up between 50% and 150% over the next 2-3 years.
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Hey guys, today we’re seeing a whole lot of red out there in the market. And my goodness, when I see all this red, it makes me hungry. It makes me want to talk about some restaurant stocks. Let’s talk about some restaurant stocks here today.
In this video, I’m going to share with you the top five restaurant stocks, in my opinion in the stock market. Right now we know restaurants across the board or have been opening essentially for the last month or so some restaurants have had to close completely, at least the inside.
Now they have done different things as far as delivery, people picking up curbside, things like that. But restaurants have started open over the past month, a lot of them are at 50% capacity. And for many of these restaurants, they do have to have at least six feet between the tables.
But there are more and more opening. But the interesting thing with these restaurants are they’ve been pivoting. They’ve been pivoting in a big way to taking food delivery, so much more serious than they ever have. Think about these big restaurants.
A lot of these that we’re going to talk about here today. They’ve always been focused on just like dine in and dine in food. And that’s been their whole focus. But no, because of Roni Rona, essentially all them are having a focus on food delivery.
They’re all taking this series and this is a new expansive opportunity for the company on all these different services, the doordash the Uber Eats grubhub Postmates all these ones are offering more and more of these big restaurants and it’s going to help them out.
I mean, we even saw here today square just announced they’re going to try to get back into the food delivery game and all this makes me conclude is that these businesses will probably be in a much stronger position in 2022.
When it comes to profitability and revenues than they actually were in 2019 I really look at this year as kind of being a down year 2019 being a year especially in the back half 2019 of recovery and I look at 2022 is kind of business being back to usual but because of food delivery that’s just gonna be a whole new opportunity for these companies.
They’ve never taken a serious and that will continue to expand once Roni Rona has passed. And then you add on top the fact that we’ve have so many restaurants in the United States of America and around the world that are have barely been making it for the longest time barely been making it like it’s really really close.
And Ronnie Rona has likely put out a lot of these businesses. Look at this. Okay, this came out back on March 27. It’s gotten a lot worse since March 27 for a lot of these restaurants but this was back on March 27.
Okay, the National Restaurant Association says 3% of restaurants are closed for good and 11% could join them within a month this basically at the end of the day a lot of these smaller restaurants that have barely been making ends meet for a long time they’re going under in this whole running run a situation.
Which means there’s less competition in the restaurant space which is you know pretty good thing for all these five companies I’m going to give you here today so let’s get in this guy’s top five restaurant stocks hope you enjoy it as always smash that thumbs up button that lets me know you enjoy a video like this where we talk about individual stocks Okay.
First stock up here of the five stocks is Darden restaurants ticker symbol d r II, this is a $70 stock here today seeing a 6% downward move, and it’s starting to look a little interesting. Okay, if you’d never heard of Darden restaurants, they own about 1800 restaurants in total, including about 167 all of gardens 518 Longhorn Steakhouse is 166.
Under the cheddars brand, and 79 yard houses as well as 59 Capital grills and a few other brands that are smaller their main business is they’re all of guard business and everything kind of comes after that.
Okay, now as far as valuation right now, it looks like it might be trading rich, right? 20 to 40, almost pushing up against 23, when usually it trades at let’s say a 14 to 18, four P. But the thing to understand is, this is a company obviously like all these restaurant brands.
It’s going through tough times over the next year, but after them, things should get pretty much back to normal, if not better than ever for this. I really like to look at the valuation okay. $9.1 billion valuation. Look at the market capitalization of this company.
It’s trading at 14 almost $15 billion, usually versus $9.1 billion. Absolutely. Roni Rona is hurting business short term, there’s no doubt about that. And it will continue to hurt short term. But at the end of the day, Ronnie runner will past these restaurants will do great again.
And like this is this is a company that’s valuation will go back to 14 $15 billion, probably within the next year or so. And then you add on top that this is a company that has very nice profitability any type of normal environment they had been growing revenues, right 2017 7.1 billion 2018 8,000,000,020 19.
This past year, they do 8.5 billion net income wise from 479 to 596 to $713 million in net income this past year, balance sheet wise with Darden restaurants, you know as far as cash and cash equivalents, over $300 million in cash and cash equivalents.
And this is a company that could easily easily raise more money. I mean, there’s just no question Darden restaurants, they can easily raise more money. If they needed to, I don’t think I think they’ll be fine with 300 million on The balance sheet. I think that will get them through this whole Roni run a situation just fine.
But if they needed to, they absolutely could raise more money. I like Darden at $70 where it’s at here today. Let me be very clear I love Darden restaurants at $50 okay $50 or below I absolutely love this stock and I have to purchase the stock very heavily if it goes down there but even at 70 here is definitely a very attractive valuation.
Okay? stork number two up here. Let me give you guys a little hint. Okay. CAKE CAKE CAKE CAKE CAKE. You know that song? Okay, what about this one? Let me give you another hint. If that wasn’t good enough. Why you got to fight with me at cheese cake. You know, I’d love to go there.
It’s a cheesecake factory. Congratulations. If you guessed right there. Number two, a five Cheesecake Factory ticker symbol cake. Okay, it’s a $22 stock here today. I mean, do I need to even explain this one? Like, just look at those cheese cakes.
I mean, who cares about valuation? Who cares about the financial? Who cares about the underlying business? And when you got cheese cakes that look like that? That’s about all I need. Oh my goodness. Okay. Cheesecake Factory.
This entire company today is selling for $1 billion. Okay, $1 billion, you get the entire Cheesecake Factory. It’s just a beautiful thing. Okay, something I appreciate about Cheesecake Factory in relation to its operations. This is a company that actually retains their employees for quite a long time, which is extremely hard to do in the restaurant industry.
I mean, extremely hard to do look at their average tenure of a general manager 13 years Okay, that you know, the restaurant industry I’m telling you guys, this is the one industry that it’s just you just run through workers you run through kitchen managers, chefs, you know, general managers.
You just run through them usually even like area supervisors and things like that usually run through in Cheesecake Factory for whatever reason, they do a very good job of retaining their talent, which is quite impressive.
Okay, now when it comes to Cheesecake Factory is not just about the Cheesecake Factory brand. Although that is an expansive opportunity, not just in terms of like delivery and getting them more on delivery platforms, people picking up the food as well as hopefully, uh.
You know, expanding com store sales over time and making those restaurants busier and busier, and hopefully checks higher, but also this company believes they can have 300 domestic locations over time right now they only have 206. Okay, 206.
Right now, they believe they can have 300 locations, but they don’t just own the Cheesecake Factory. That’s what a lot of people don’t even know they think they just don’t Cheesecake Factory. They also own this up and coming restaurant brand.
I got to try this place out. I’ve heard good things about it that we got one, I think it’s in Summerlin area, it’s called North Italy or a North Italy, they have a potential for 200 locations are talking about just domestically.
Right now they only have 23 locations. So they’re talking about potentially 10 xe locations, let’s say over the next 510 years, and no one actually has a much higher average check than actually the Cheesecake Factory. So this one looks pretty dang attractive calm store sales and fiscal 19.
Were up 6% for this North Italy brand. So this has a big potential out there as well to grow the company. Then lastly, they own what’s called Fox restaurant concepts, which basically, they try out a lot of different new up and coming brands, okay, now basically start these restaurants, see how they do see our comp store sales do SEO folks like these type of brands.
And then essentially, if they find a hit, they’ll go ahead and expand that into more and more states more and more cities around the United States and expand it further and further. And so they’re constantly trying out new restaurant concepts. And I definitely appreciate that.
Because, you know, when you’re looking at a company with a $1 billion valuation, and you’re thinking how do we get to a $5 billion valuation over time, or 10 billion plus dollar valuation over time, you got to really come up with more brands and just having the Cheesecake Factory brand. Now, if we look back, this is a very important chart I’m sharing with you guys here.
Okay, this shows you a comp store sales for Cheesecake Factory versus their peers. What you’re going to find is Cheesecake Factory usually outperforms the other ones when it when it comes to growth.
But the one I have circled, there’s actually the Great Recession 2008 through 2010, very important look at their sales went down much less than the industry. I think this is extremely, extremely important because we’re thinking about right now with the whole Roni Rona situation, how long is this going to go for?
Is it going to last another six months? 12 months, 18 months? 24 months? We don’t know. We don’t know what the lasting effects are. But let’s just say you know, we’re in a downturn for the next one to two years right. Cheesecake Factory should perform better than everybody else performs.
If we go back to historically looking at how this company has done so that is definitely something that makes me feel much much much more bullish about this stock. Okay, we look at the income statement of Cheesecake Factory.
And we see this is a company that generally makes anywhere from 100 mil to 150 mil of net income a year and that’s just currently okay. On a $1 billion market cap. That’s pretty dang attractive. Okay, that is pretty dang attractive. I believe they will get back to that place.
Probably within two years. Okay, probably within two years, we’ll be able to get back to that place for them. Making anywhere from 100 mil 250 mil of net income on that bottom line. Now I will say when you look at the balance sheet.
They picked a great time to be increasing cash, you go back to 17, the only 6 million cash then you go to 18 they increase that to 26 million which is over a 4x up their cash and then essentially they over doubled up their cash going into this year with 58 mil so it was a great time for Cheesecake Factory to basically be increasing cash.
Let’s put it that way. Okay, now current year, obviously Sales are expected to fall big 18.8% as far as revenue decline. Analysts expect the company to grow revenues next year though almost 30%. I will say I’m a little less bullish on next year.
As far as the numbers go. I like to be a little I guess you say a little more pessimistic than and then some of these numbers the analysts have. But I mean, you know, even if they grew 20% that would be pretty dang impressive.
For next year numbers came overall when it comes to Cheesecake Factory. I like this talk a lot of $22 which was trading out here today. I love this stock at $20 I’m loading the boat if it ever was to go under $17 again.
I highly doubt it’s going there but if it was to go ever under 17 again, I will load the boat on the stock I really really liked this one okay, stock number three of five let me give you an A hand okay?
All my exes live in Texas like I’m George Strait. Okay, I think you guys know this one. Oh my gosh, stock number three or five Texas Roadhouse ticker symbol t XRH on this one is a $51 stock here today. I hope you guys are getting these hints. Okay.
Now I gotta say First off, I want this one lower. Texas Roadhouse. I want this one lower. This is a stock that usually trades at $50 $60 a share is trading at 5152 I got to get this one lower. This is a one on this list where I’m like, I need it lower before I can really consider the bias more although I do love it so much.
Okay, though, as far as revenues, look at the growth over the past several years, and revenue just growing, growing, growing. Look at the net income growth growing, growing, growing. It’s one of the few restaurant chains that is actually very stable with their revenue growth in their income growth as far as continuing to grow year in and year out.
Also, it’s my favorite restaurant chain. I think it’s so well run. I love this one. Okay, there’s one of the only like chain restaurants you might find me I drive all the way to North Las Vegas to go the Roadhouse North Las Vegas, you know far that is like a million miles away. Okay, I drove all the way over there to go to Texas Roadhouse.
You might see me in the yellow Model X one day there okay, if you see a yellow Model X and the Texas Roadhouse parking lot, I can guarantee you that is me Okay, I can guarantee you That’s me. I and by the way, I just want to say I call this okay for a year I was telling my wife they need to put a Texas Roadhouse on St. Rose is going to do crazy business.
And all of a sudden, like just a couple weeks ago, they announced they’re going to put a Texas Roadhouse on St. Rose. You know, unless you live in Vegas, you have no clue what the heck I’m talking about right now. Let’s get back on track. Okay, now the chief executive officer of Texas Roadhouse.
I told you guys I like the management team there. I think they’re doing a great job. Wayne can Taylor will be donating his checks from the pay period beginning March 18 through January 7 2021. Okay, so basically that money will be given to his workers.
Louisville business first reported Taylor’s total compensation in 2018 was 1.3 million his base salary was 525,000. He’s actually donating that for his frontline employees. very commendable. Okay, Wayne, please create a YouTube channel.
I don’t care what it’s about just so we can smash your thumbs up button. Okay, just for that very commendable move there. Okay, very you know, this is a very well run company. Let’s just put it that way. Okay.
Cash and cash equivalents on this company. 230 mil, as of the latest quarter. So this is a company that will easily get through, you know, whatever we’re going through whether this thing lasts six more months. 12 more months. 18 months. 24 months, it doesn’t matter.
This company will get through so I love Texas Roadhouse. I’m not a big fan at the stock price it’s at I understand it’s one of those stocks that always trades at a premium because such a well run company. So it’s a great company.
I’m just not the biggest fan of where it’s at right now. Okay, stock number four or five here’s your here’s your hand. Yeah, you got me that young okay. I can’t say that young so many times. Okay. Young brands. Stock up here. Stock number four or 580 $6 here today if you don’t know yum brands.
I say you probably do know yum brands you just don’t know yum brands. Okay? They own KFC. They own Taco Bell, and they also own Pizza Hut. 22,000 KFC, which is crazy because they only have 7000 Taco Bells. I would have thought they had way more Taco Bells then 7000 but 7000 Taco Bell’s 22,000 KFC 18,000 Pizza Hut for the young brand.
Now if you think about this one okay. You think about Taco Bell? Yes, they do have dine in where essentially you go up to the counter, you order you go sit down. But how many people really do that and Taco Bell?
I think About most most people when they go to Taco Bell they what they go through the drive thru usually if you go to Taco Bell drive thru is always really busy right? That’s what most people do when it comes to Taco Bell so this whole Ronnie Verona’s situation.
I’m not sure how much it really hurts the business because most people go there anyways to go through the drive thru and the drive thru has been open this whole time right? KFC same exact situation right who really goes to they eat in a KFC?
No judgment if you go Yeah, she eat in a KFC but I’m like if you go to KFC usually you go through what the drive thru you pick up your fried chicken and you go Okay, and then you think about Pizza Hut, right and Pizza Hut back in the day they used to have like dine in I don’t even know of any pizza huts that still have dine.
And by the way, my mom used to be a waitress at Pizza Hut way back in the day. Isn’t that crazy? a waitress at Pizza Hut. Back in the day when she was pregnant with me in Pizza Hut over the last few decades.
They moved to essentially like a strip mall strategy where they’ll just you know, have a small location you go in there, you pick up your pizzas that you called in, or you online ordered, and there’s like nowhere to like, sit and eat at Pizza Hut.
So at the end of the day, their business probably hasn’t been hurt that bad. I mean, I can see maybe a sales dip a bit from some people that maybe don’t even want to go for fast food. But the end of the day, you think about how many restaurants have been closed.
And if people still get to eat it down today, right? And some people just don’t feel like cooking right? So some people might usually go to a restaurant they’re like let’s just go to Taco Bell tonight or KFC or go pick up some fast food.
So actually some of these fast food chains might actually be doing a little stronger business Believe it or not, then what they would be doing usually just because amount of restaurants that have been closed Okay.
Market capitalization on this one usually trades well over $30 billion anywhere from let’s say 30 to $34 billion market cap usually that’s where it trades here today if you’re buying yum brands you get for $26 billion.
Okay, so you’re getting a let’s say four to $8 billion discount on yum brands a company that you know maybe their sales have been hit a little bit but it’s gotta be a very very very small amount when it comes to yum brands.
This is a company that angels are expecting revenue to decline two and a half percent in the current year okay, two and a half percent. Personally I think that’s about right I’m expecting two to 4% for yum brands.
Okay, but next year the company is expected to grow revenues 10% Okay. 10% for next year this is a company is taking food delivery way more serious than they ever had before. I think I’m passing you know, young and a lot of these fast food big chains I’ve looked at as well we don’t really need food delivery, people just come to our drive thru and that’s fine.
But all these all these big players, all these big fast food companies have also realized oh, there’s a huge market opportunity for us offering food delivery on Uber Eats and all these different services and so I think young is actually another company out there that will actually see their business be stronger in a year or two from now then actually where it was last year.
Which is quite interesting. So we’ll see what happens with that one, but it’s very, very intriguing. Okay, last stock stock number five up here Okay, you guys know this one. Okay, here’s your hint. Okay. Don’t Don’t while you’re bringing the Buster in here because the Buster cut me out a hidden cost though Buster brought me back.
Okay. Does that my good Vin Diesel voice they’re more talking about this. Just like the Fast and Furious. This is a high risk high reward stock you know those guys over there and gals they lived high risk, high reward is that high risk high reward stock dude and Buster stock? If you guessed this one, correct.
You give yourself a thumbs up okay, sock number five of five. It’s a $14 stock here. It’s high risk. It’s high reward if you don’t know Dave and Busters. This is their motto. Eat Drink, play, okay. It’s like I restaurant meets kind of like a sports bar meets in arcade.
Okay, I’m guess I’m showing you guys some images now. And you know, it’s a cool place. It’s a cool place. Usually, the main issue is, you know, just look at some of these photos. Look at the you know, they’re playing in the arcade.
It’s everybody’s close together. Everybody’s touching everything. It’s the exact opposite place, you’d want to be in a running run a situation, right? Who wants to be playing air hockey next to a whole bunch of people when running around is going on and playing at all these machines?
Like it’s the exact wrong business model you want in today’s day and age of Ronnie roenick going around, right? It’s like the worst, like the worst worst, okay, and then think about how the people that would usually be playing at these games and not clean their hands and go back and start eating and drinking and things like that people are nasty, I believe massino all the time.
Okay. And it’s just not a good business model at the moment. Let’s just be completely honest. The other issue with this one is their balance sheet. This is a company that’s only had, you know, going into the Roni, Rona, they their balance sheet was so weak at $24 million in cash and cash equivalents.
That’s a really low number for a company the size of Dave and Busters ticker some play on this one, okay. But they did raise some money very recently. So now they have $156 million in cash and cash equivalents. They also increase their debt by the same amount essentially, but they have more cash.
So the likelihood they’ll go under much smaller now okay. It is much smaller likelihood that they will go under in this whole scenario. We see that analysts expect this company declined massively this year 50% decline in revenue growth expected this year.
But on the flip side next year, analysts are expecting 69% revenue growth. That number will be 100% dependent on Roni, Rona and how that goes into the fall and into the wintertime. If we see Roni Ronan calm down in a big way, or kind of just slowly go away or something like that, I can see Dave and Busters haven’t 69% revenue growth next year.
If Roni roenick cases continue to climb in a major way, I don’t think there’s any way possible his company grows 69% next year, although I could see growth pretty much regardless just because they’re going to come off of such a horrible 2020.
But at the end of the day, when it comes to David Foster stock ticker symbol play, this is a stock that’s $14 here today, this is a stock that usually trades 3035 40 $45 a share, okay, as long as they make it through, they’re probably going back to 30 or $40 a share again, it’s probably not going to happen tomorrow.
But over the course of next 123 years, this will probably be a 30 to $40 stock again, as long as they make it through this because like the business will resume a lot of people do love Dave and Busters and so I can definitely see their net income coming back in a couple years. Okay, but once again.
I just want to mention this is a high risk, high reward play, it’s not as risky as it was because they did raise that extra cash now so they have a little more leeway there with play. Okay, and Kevin, if you’re watching this video, you know who you are.
I hope you enjoyed that one. Okay, so guys down there in the description area, I’ve got a bunch of free resources linked down there if you want to check out and just kind of know more about me or my private stock group.
You can check out that down there how to outperform the stock markets a free document that I wrote for you guys in 2020 if you want to check out that that’s down there as well some other resources. So if you guys enjoyed today’s video, as always, let me know in that comment section what your favorite restaurant stock is right now.
I’d love to hear from you guys. As always, thank you for watching. Have a great day.