Fast Food Stocks for 2013
In 2013 Mastery wants to cash in on the best and overlooked Fast Food stocks. America will continue to get fatter and spread its gluttony all over the planet. That means its time to load up on McDonalds Corp (MCD), Yum! Brands Inc (YUM), and risk some on Chipotle Mexican Grill (CMG).
Both McDonalds and Chipotle are not finishing 2012 on a high note for shareholders. Yum! Brands is on the other hand firing on all cylinders and increased 17% per share in 2012. Yum! did this while still paying out a 1.94% annual dividend yield. McDonalds shares fell10% this year and Chipotle has tanked 29% in the last 6 months. Chipotle has yet to offer a dividend. Buy 10 tacos and get one free burrito is about all you get for $280 a share. McDonald's on the other hand now sports a 3.4% annual dividend yield thanks to its depressed stock price.
Mastery started warming up to Chipotle in October and now that their shares have added another $30 we really like the trade. The analyst community is starting to rally around CMG and its a stock that could easily increase 30% from today's price before Wall Street notices. Last month Chipotle added $100 million to its existing $100 million share repurchase plan announced the previous month. Chipotle caught the eye of Bank of America last month as well, they gave the stock and upgrade to "Buy". BofA likes CMG's 30% discount to its 5-year average valuation.
Yum! is the winner of the three heading into 2013, there's reason to believe that trend will continue. Last week Goldman Sachs upped their price target on Yum! Brands to $77 (implies a 11% 12 month increase from today price).
McDonald's just brought back the McRib, isn't that reason enough to buy the stock?
Bottom line: Diversify your stock portfolio buy adding a little Fast Food to it before the New Year. Both Yum! and McDonalds offer a dividend and could be steady move higher in 2013. CMG could double from its current valuation and has finally bounced from its recent decline.
Here's how those 3 stocks look today:
Yum! Brands Inc (YUM) shares have traded between $57.45 and $74.75 over the past 12 months. YUM shares are now trading with a P/E Ratio of 20 and EPS of 3.4. Yum! is trading at $69.07 and its shares are 8% from its 12 month high.
McDonald's Corp (MCD) shares trade at $89.91 and are 7% from its 52-week low. McDonald's has a reasonable P/E Ratio of 16.7 and EPS of 5.31.
Chipotle Mexican Grill Inc (CMG) shares have traded between $233.82 and $442.40 over the past 12 months. CMG shares are now trading with a P/E Ratio of 32.2 and EPS of 8.6.
Chipotle is trading at $286.68 and its shares are 18.44% from its 12 month low.
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