Portfolio Alternative To McDonald's Coming In Form Of Habit Restaurants IPO

Summary

• McDonald's saw same store sales decline 3.3% on declining traffic.
• The Habit Burger scored the best tasting burger at Consumer Reports.
• The Habit Burger believes it can hit 2,000 locations in the United States.
• Company has 42 straight quarters of positive same store sales growth.

Think you can name the best tasting burger in the United States? According to Consumer Reports readers, it's a chain you've likely never heard of, unless you reside in California, Utah, Arizona or New Jersey. Those are the four states that have locations under the brand The Habit Burger, owned by The Habit Restaurants (Pending:HABT). That small relatively unknown chain is set to spread across the nation with plans of 2000 locations. An upcoming IPO should not be missed and could provide an exciting alternative to that boring investment in McDonald's (MCD).

From its S-1, "The Habit Burger Grill is a high growth, fast casual restaurant concept." The summary of the business uses words like "fresh," "never frozen," "made to order," "USDA choice," "open flame," "cut daily," "freshly prepared salads," all items you probably wouldn't see to describe your favorite fast food chain. The company prides itself on its four pillars of quality, environment, hospitality and value.

Consumer Reports ranked items at 65 restaurants. The Habit Burger was ranked first in taste of burger. The chain scored an 8.1, and finished just ahead of In-N-Out Burger, Five Guys and Smashburger. The results came after 96,208 meals when consumers were asked to rate items on a 1 to 10 scale simply on taste. The relatively unknown chain scored top marks in one of the most trusted reports and can now be called "America's favorite burger." McDonald's ranked dead last in the taste category with a score of 5.8.

Here are the company's strengths:

· The "Habit Difference"

· Broad customer appeal

· Highly productive restaurants

· Built for growth: highly experienced and committed management team driving strong performance

The company's growth initiatives are:

· Disciplined growth strategy to capture our significant market opportunity - we are disrupting the largest restaurant categories

Analyst’s Disclosure:The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.