But this stock, which pays a dividend yielding ~2%, has seen the light at the end of the tunnel. Yum! Brands (NYSE: YUM) held steady at the $100 to $110 level until the coronavirus outbreak halted the economy. This will give it a strong cash position and financial flexibility, in case uncertainties worsen due to the pandemic. To be on the safe side, the company filed a $1 billion borrowing with banks. Its operating income greatly exceeds its capital expenditures, interest expenses and administrative costs. Initial customer traffic may fall, but people will put on a mask to comply with the fast-food chain’s new rules.įinancially speaking, McDonald’s has a healthy balance sheet. This will not offset the lost business, but should keep its customers getting the service they demand.Īfter the reopening and subsequent resurgence in coronavirus cases, McDonald’s implemented a mandatory mask requirement for customers. McDonald’s experienced a surge in drive-thru volumes. The burger giant also closed all of its locations in Ireland and the United Kingdom. This simplified operations and helps lower the workload for its kitchen staff and crew. Still, the company adapted to the tougher market conditions by temporarily taking out some items from its menu. The fast-food chain will likely report a strong drop in revenues for the current quarter. McDonald’s (NYSE: MCD) fell as low as $124.23 in March 2020 only to bounce back over the past few months. Stock Rover thinks the fair value is $63.48. The stock is entering a period of seasonal weakness starting in September: QSR-owned Tim Hortons, a popular chain in Canada, will most certainly report a strong drop in sales after many provinces in the nation imposed a lockdown.Īt 17 times earnings and the majority of analysts rating the stock a “buy,” QSR stock is continuing its rebound. This year stands in stark contrast to last year’s strong results. Management said that “for the vast majority of our guests purchasing the sandwich, we saw that they actually spent more on other products than on the sandwich itself, resulting in very healthy check levels and incredibly valuable awareness and trial.” In effect, QSR noticed the strong demand for this product that Chick-fil-A enjoyed. This is due to the launch of that brand’s cult-favorite chicken sandwich. Sales grew an impressive 18% in the year. But since Burger King accounted for roughly 2% of sales, the company didn’t expect a material downturn in business.īurger King added $23 billion in sales for QSR, growing 9% from the year before. In its last quarter, the company said that it was carefully watching the lockdown unfold in China. The company owns Burger King, a global business that performed well last year. Last summer’s breakout to around $76 proved very short-lived. Restaurant Brands International (NYSE: QSR) has traded in the $40 to $60 range since 2017. lifted restrictions, investors need to re-evaluate the following seven restaurant stocks after a quarter-long rally. Similarly, restaurant sector stocks have reduced the steep discounts we saw at the height of the shutdown.Īfter the U.S. Both stocks are trading near 52-week highs. Investors who bought into stocks like Conagra Brands (NYSE: CAG) or Kellogg (NYSE: K) for exposure to the processed and packaged goods market did well. That would alter income in other industries because the price of some essentials may increase at a time of lack of liquidity.” “the production of processed food may not be sustained within months, and the United States could see a disruption in the market of perishable food. The government increased spending as the Federal Reserve eased rates to increase liquidity.Īt the time Laura Gonzalez, Associate Professor of Finance at California State University Long Beach, said: government approved a monstrously large stimulus package, in part to help consumers pay the rent and buy necessities. But industries that require face-to-face interaction, especially in the restaurant business, are set to slowly recover.Ī few months ago, the U.S. The steep discounts in these stocks narrowed ahead of the re-opening.Ĭompanies are still supporting teleworking as they continue running. But while the service industry was decimated, alongside the tourism and hospitality industries, the re-opening from coast to coast led to a steady rebound in restaurant stocks. Of course, given what we knew about the severity of the novel coronavirus, the world had to do anything to stop its spread. ![]() The shutdown of non-essential businesses across the United States was a sudden and unexpected shock to the economy.
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