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Dunkin' Brands Is Becoming More Attractive

Mar. 08, 2020 1:08 PM ETDunkin' Brands Group, Inc. (DNKN)9 Comments
AllStarTrader profile picture


  • Dunkin' Brands shares have traded to new lows as the market fears about the Coronavirus intensifies.
  • The company continues to perform well, but it did give guidance that came in lower than expectations.
  • While shares have sold off quite a bit, I am still waiting for perhaps a better entry point.
  • We look at results and where the shares may be a buy.

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Source: Seeking Alpha

Dunkin' Brands (NASDAQ:DNKN) formerly known as Dunkin' Donuts, has seen its shares fall to 52-week lows along with the rest of the market as it has pulled back. While consumer buying habits keep the revenue growing, there is a fair price to pay for the rather low but steady growth. The company trades at a multiple that implies much higher growth than is forecast. While the company operates a brand that has staying power and perhaps is even recession resistant, it does not deserve such a premium in my opinion. I would love to have shares in my portfolio should they fall a bit more. The company recently cut earnings expectations and this to me means the recent sell off was warranted. Additionally, the yield would need to be higher as I look for dividend yields generally above 3% for an investment. Despite the current virus fears, I believe Dunkin' would see a limited impact unless there was massive work place and school closures. Most customers stop in due to a routine often associated with work.


Dunkin' Brands recently reported earnings that beat on the bottom line and were in line with revenue expectations.

Source: Seeking Alpha

The company reported a healthy 5.1% gain in revenue and saw earnings rise about 7.8%. The company really improved on many fronts with margin growth of 2% and higher royalty fees from its franchises. Comparable store sales for Dunkin' branded U.S. locations grew 2.1%, Baskin-Robbins U.S. comparable sales actually grew 0.8%. The company has over 9,600 stores in the United States and plenty of room to grow. Despite this large number, the company is still predominantly located upon the East coast and has plenty of room for expansion into the West.

Perhaps some of the reason that Dunkin' shares have

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This article was written by

AllStarTrader profile picture
Started investing at 11 years old. Self taught, taking an analytical all around thought process approach to investing. Look at everything from all angles and every view and you will never miss anything. I believe in collecting dividends from most of my investments, just as an investment in a private company would return profits, so should my stocks. I prefer to invest based on fundamental values, but will consider the story of the company itself when necessary.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in DNKN over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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