YUM

Retail Weakness: Blame the Election?

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Image Source: DonkeyHotey By Kris Rosemann The 2016 election cycle has been one characterized by unprecedented amounts of criticism and accusations, of both the personal and political variety, and it may be true that the perceived political environment from the view of the general public has not been in such a state of uncertainty for some time. Let’s not get into the details of who called whom what in last night’s Presidential debate, but some parents were reportedly not allowing their children to watch the debate out of fear that their values or outlook on democracy could be skewed. But could the uncertainty surrounding the election actually be enough to impact consumer activity at retail outlets and restaurants? Some are … Read more

Dividend Increases/Decreases for the Week Ending September 30

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Below we provide a list of firms that raised/lowered their dividends during the week ending September 30. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week American Express (AXP): now $0.32 per share quarterly dividend, was $0.29. Artesian Resources Corporation (ARTNA): now $0.2283 per share quarterly dividend, was $0.2249. AZZ (AZZ): now $0.17 per share quarterly dividend, was $0.15. BancFirst (BANF): now $0.38 per share quarterly dividend, was $0.36. Banner (BANR): now $0.23 per share quarterly dividend, was $0.21. Calavo Growers (CVGW): now $0.90 per share annual dividend, was $0.80. Clacor (CLC): … Read more

Restaurant Traffic – What’s Going On?

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By Kris Rosemann What’s going on with restaurant stocks these days?  Sonic’s (SONC) announcement of preliminary results for the fiscal fourth quarter of 2016, ended August 31, has been the latest catalyst to drag the restaurant sector (BITE) lower due to it reporting “lower-than-expected traffic, reflecting lower consumer spending in restaurants and continued aggressive competitive activity.” Our newsletter portfolios have not been spared the pain as shares of Dividend Growth Newsletter portfolio holding Cracker Barrel (CBRL) have faced pressure since its fiscal fourth quarter report September 14, and Best Ideas Newsletter portfolio holding Buffalo Wild Wings (BWLD) has suffered as a result of the weak data as well. Sonic’s report was not the first we’ve been hearing of slowing consumer … Read more

Yum! Separation on Track; China Picking Up in 3Q?

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Image Source: Yum! Brands, 2015 Annual Report By Jessica Bishop Squashing a recent report from Bloomberg that suggested the Yum! (YUM) separation had been delayed, the executive team heading the KFC, Pizza Hut and Taco Bell franchises said in its second quarter 2016 report, released after the close July 14, that all is well with plans to separate its fast-growing operations in China from the rest of the company. We outlined our latest thoughts on the China separation in our late June piece, “Yum! Does One Plus One Equal More Than Two?” and while not much has changed in the past few weeks, we continue to monitor Yum! — not only in the event the separation causes a mispricing with … Read more

Yum!: Does One Plus One Equal More Than Two?

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Image Source: Dave Proffer Yum! Brands (YUM) has a fantastic portfolio of restaurants including KFC, Taco Bell, and Pizza Hut. It operates in more than 140 countries with nearly 43,000 restaurants, and despite the maturity of its three core concepts in the US, Yum! Brands continues to expand its store base at an incredible rate, particularly in Asia (in 2015 alone, it opened almost 2,400 new restaurants companywide, averaging ~6 new restaurants daily). Yum! Brands will be pursuing major changes in the near term, however, and is set to split into two publicly-traded, independent companies by the end of 2016: ‘Yum! China’ and ‘Yum! Brands.’ Though management says the split is “a classic example of ‘one plus one equaling more … Read more

Cracker Barrel Delivers Big Dividend

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Image Source: Eli Christman Well, how do you like that? Our favorite dividend growth restaurant idea, Cracker Barrel (CBRL), which was recently added to the Dividend Growth Newsletter portfolio February 1, 2016, announced an impressive $3.25 per-share special dividend June 1, as it increased its quarterly payout 4.5%, to $1.15 per share ($4.60 on an annual basis, implying a forward dividend yield of 2.8%). Though many investors have pointed to McDonald’s (MCD) resurgence as the “story in retail,” we’re mighty pleased with what we’ve been seeing at the “old country store” and believe it to be a more resilient idea than the Golden Arches. Shares of Cracker Barrel surged June 1, breaching new all-time highs, and we’re expecting bigger things … Read more

Restaurant Roundup; Valuations Overcooked

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Image source: McDonald’s Investor Relations page By Kris Rosemann McDonald’s Comps Still Expanding McDonald’s (MCD) continues to believe in the turnaround strategy it implemented about a year ago, and the market appears to be on board as well. The company’s biggest appeal remains its brand recognition, and the above screen grab of its ‘Investor Relations’ page on the corporate site hints that it is well aware of this. Nevertheless, the burger giant has had a solid string of quarters as of late. Global comparable sales in the first quarter of 2016 increased more than 6% from the year-ago period, and US comparable sales grew 5.4% thanks to the broad acceptance of its All Day Breakfast strategy. We were skeptical of … Read more

Rivals Gaining Ground Against B-Dubs?

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By Brian Nelson, CFA It turns out that franchisees selling restaurants back to the franchisor is the red flag we knew it was. If you recall, Buffalo Wild Wings (BWLD) announced deal-related expenses related to the acquisition of more than 40 franchised locations in Texas, New Mexico, and Hawaii, “We’ll Be Looking to Add to B-Dubs Sometime after the Drop (October 2015),” and at the time, we were willing to give the restaurant the benefit of the doubt that this wasn’t the red flag it turned out to be. We were wrong. After all, if owning a B-Dubs is so hot, then why would the franchisee be looking to sell it back to the company, and why to the company? … Read more

The Delicious Business Model of Domino’s Pizza

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Domino’s Pizza (DPZ) offers investors one of the best business models, and the company garners one of the ‘Highest Rated’ economic castles in our coverage universe. That means that for each dollar of capital it invests the company generates gobs and gobs more, so much that it is more than almost any other company that we follow. The franchiser really sets the standard with respect to what we define as a pure “Economic Castle.” Not only did the pizza giant raise its dividend nearly 23% February 25, but the company beat expectations on both the top and bottom-line in its reported fourth-quarter results. It’s hard to believe, but domestic same-store sales grew more than 10% in the quarter versus the … Read more

We Like the News! Buffett Scoops Up Kinder Morgan; FVE: $20

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It looks like crude oil (USO) overproduction will continue. Dashing hopes that any rational behavior would prevail in the energy resource markets, member nations of OPEC February 16 said not that they would cut output but that they would not increase crude-oil output any further, as if the current pace of production isn’t already drowning the world in the black liquid. It turns out the rumor from last week had some basis to it, “Your Hard-Earned Money,” but it didn’t have much substance, in our view, especially since the deal hinges on cooperation from Iran, which remains dedicated to increased production to reach pre-sanction levels. We’re not reading much into the news, as Saudi Arabia, while included in the parties … Read more