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OpenTable And E-Rewards Network: Thriving In Support Of Food Industry

|Includes: OpenTable, Inc. (OPEN)

As the US Restaurant industry continues to thrive and generate record profits, stocks in the space continue to rise. Both, casual dining and fast food stocks, are some of the strongest stocks around even with the recent market sluggishness. Well-known dining stocks like Yum Brands (NYSE:YUM), McDonald's (NYSE:MCD), Darden Restaurants (NYSE:DRI), and DineEquity (NYSE:DIN) are all sitting next to 5-year highs and have all beaten the S&P 500 handily over the past 5 years looking at performance with DineEquity being the biggest gainer at close to 200%.

With the dining space registering such strong returns, related companies have been benefiting.

OpenTable (NASDAQ:OPEN) is the world's leading provider of online restaurant reservations, seating more than 12 million diners per month via online bookings across more than 28,000 restaurants. The OpenTable network connects restaurants and diners, helping diners discover and book the perfect table and helping restaurants deliver personalized hospitality to keep guests coming back. The OpenTable service enables diners to see which restaurants have available tables, select a restaurant based on verified diner reviews, menus and other helpful information, and easily book a reservation. In addition to the company's website and mobile apps, OpenTable powers online reservations for nearly 600 partners, including many of the Internet's most popular global and local brands.

The big news for OpenTable this summer has been its partnership with Facebook (NASDAQ:FB) that was announced last month. The two companies struck a deal that will allow users to reserve tables at restaurants via a Facebook app, as the world's No. 1 social network continues to expand its mobile services. In an announcement on its website, Facebook said the feature would be available on its mobile pages for more than 20,000 OpenTable restaurant customers across North America. This was seen as a positive for the OPEN as Facebook's massive user base is expected to boost OpenTable's clientele within a very short span of time. The deal also gives OpenTable an edge on recent competition from Groupon (NASDAQ:GRPN) and Yelp (NYSE:YELP) in the online reservation industry. The market sent OpenTable's shares up nearly 8% to 52 week highs on the results.

Overall, OpenTable has been one of the best growth stories over the past year as the stock is now up 80% over the past year and this should continue to be one of the top gainers in the market with its sustainable business model producing revenue growth rates in the mid-teens. The market has recognized management's efforts and has slapped the company with a forward P/E based of 40, a multiple typically reserved for some of the most high-quality growth stocks on the market. So yes, you are paying up but the results and the company's innovative culture speak for themselves.

E-Rewards Network (OTCPK:ERNI) specializes in building and implementing key strategies for firms with high-potential and capabilities of achieving sustainable growth. E-Rewards Network provides professional support for its consolidated subsidiaries through operational business management, financing, and controlling activities. The company targets the following business sectors: the customer loyalty management market, the gift card industry, the online food ordering industry and the marketing consulting industry. That's the official company background; however, the focus of the company has been on the online food ordering industry.

In a recent news release, the company discussed the growth the company is seeing in the restaurant business. ERNI announced that as of August 26, 2013, Earn IQ, the company's flexible dining rewards program, has officially launched its rewards program with an adequate number of participating restaurants in selected areas of Brooklyn, Queens, Manhattan, and Long Island. The program, which had been in its pilot phase since February 2013, has garnered 2,000 registered members since its start -- a number that expects to grow to around 10,000 over the next few months. The growth is real as already the company has strengthened its revenue projections and asset valuation based on what executives are seeing in the uptake of Earn IQ.

The success of OpenTable suggests that the future is bright for ERNI as there will always be demand for helping diners bringing consumers through the door. Online ordering is the next frontier for ERNI and looks like it is looking in the right direction. Last summer, German food-ordering site Delivery Hero raised $49 million in a round of funding for German food-ordering site Delivery Hero. OpenTable sports a market cap of $1.7 billion, so ERNI has nowhere to go but higher with continued growth in the online food ordering business.