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GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 6/10

Cash to Debt 0.26
WEN's Cash to Debt is ranked lower than
52% of the 320 Companies
in the Global Restaurants industry.

( Industry Median: 0.59 vs. WEN: 0.26 )
WEN' s 10-Year Cash to Debt Range
Min: 0.03   Max: 44.04
Current: 0.26

Equity to Asset 0.42
WEN's Equity to Asset is ranked higher than
57% of the 316 Companies
in the Global Restaurants industry.

( Industry Median: 0.48 vs. WEN: 0.42 )
WEN' s 10-Year Equity to Asset Range
Min: -0.44   Max: 0.51
Current: 0.42

Interest Coverage 1.96
WEN's Interest Coverage is ranked lower than
64% of the 245 Companies
in the Global Restaurants industry.

( Industry Median: 16.79 vs. WEN: 1.96 )
WEN' s 10-Year Interest Coverage Range
Min: 0.08   Max: 5.79
Current: 1.96

F-Score: 7
Z-Score: 1.40
M-Score: -2.67
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 5/10

Operating margin (%) 9.15
WEN's Operating margin (%) is ranked higher than
82% of the 319 Companies
in the Global Restaurants industry.

( Industry Median: 6.33 vs. WEN: 9.15 )
WEN' s 10-Year Operating margin (%) Range
Min: -22.69   Max: 13.01
Current: 9.15

Net-margin (%) 4.67
WEN's Net-margin (%) is ranked higher than
76% of the 319 Companies
in the Global Restaurants industry.

( Industry Median: 3.70 vs. WEN: 4.67 )
WEN' s 10-Year Net-margin (%) Range
Min: -26.32   Max: 529.48
Current: 4.67

ROE (%) 6.10
WEN's ROE (%) is ranked higher than
62% of the 313 Companies
in the Global Restaurants industry.

( Industry Median: 9.46 vs. WEN: 6.10 )
WEN' s 10-Year ROE (%) Range
Min: -204.41   Max: 163.62
Current: 6.1

ROA (%) 2.56
WEN's ROA (%) is ranked higher than
61% of the 320 Companies
in the Global Restaurants industry.

( Industry Median: 4.37 vs. WEN: 2.56 )
WEN' s 10-Year ROA (%) Range
Min: -10.33   Max: 43.27
Current: 2.56

ROC (Joel Greenblatt) (%) 17.30
WEN's ROC (Joel Greenblatt) (%) is ranked higher than
70% of the 318 Companies
in the Global Restaurants industry.

( Industry Median: 16.96 vs. WEN: 17.30 )
WEN' s 10-Year ROC (Joel Greenblatt) (%) Range
Min: -23.37   Max: 53.73
Current: 17.3

Revenue Growth (%) 3.90
WEN's Revenue Growth (%) is ranked lower than
55% of the 270 Companies
in the Global Restaurants industry.

( Industry Median: 5.00 vs. WEN: 3.90 )
WEN' s 10-Year Revenue Growth (%) Range
Min: -59.2   Max: 57.5
Current: 3.9

EBITDA Growth (%) 3.50
WEN's EBITDA Growth (%) is ranked higher than
63% of the 223 Companies
in the Global Restaurants industry.

( Industry Median: 5.60 vs. WEN: 3.50 )
WEN' s 10-Year EBITDA Growth (%) Range
Min: -54.6   Max: 80.3
Current: 3.5

EPS Growth (%) 40.10
WEN's EPS Growth (%) is ranked higher than
95% of the 181 Companies
in the Global Restaurants industry.

( Industry Median: 7.70 vs. WEN: 40.10 )
WEN' s 10-Year EPS Growth (%) Range
Min: -63.2   Max: 152
Current: 40.1

» WEN's 10-Y Financials


Revenue & Net Income
Cash & Debt
Oprt. Cash Flow & Free Cash Flow

» Details

Guru Trades

Q3 2013

WEN Guru Trades in Q3 2013

Stanley Druckenmiller 2,000,000 sh (New)
Chuck Royce 103,200 sh (New)
John Keeley 89,500 sh (New)
Jim Simons 1,935,882 sh (+197.79%)
Steven Cohen 400,000 sh (unchged)
Mario Gabelli 120,710 sh (unchged)
Paul Tudor Jones Sold Out
Murray Stahl 27,774,433 sh (-4.68%)
Mason Hawkins 18,878,200 sh (-46.09%)
Steven Cohen 24,500 sh (-76.88%)
» More
Q4 2013

WEN Guru Trades in Q4 2013

Joel Greenblatt 170,815 sh (New)
Paul Tudor Jones 37,000 sh (New)
Jim Simons 2,102,282 sh (+8.6%)
Stanley Druckenmiller 2,000,000 sh (unchged)
Mario Gabelli 120,710 sh (unchged)
Chuck Royce Sold Out
John Keeley Sold Out
Steven Cohen Sold Out
Murray Stahl 26,408,824 sh (-4.92%)
Mason Hawkins 11,054,728 sh (-41.44%)
» More
Q1 2014

WEN Guru Trades in Q1 2014

Steven Cohen 12,836 sh (New)
John Keeley 100,000 sh (New)
Jim Simons 4,191,378 sh (+99.37%)
Paul Tudor Jones 72,700 sh (+96.49%)
Murray Stahl 31,190,746 sh (+18.11%)
Mario Gabelli 120,710 sh (unchged)
Mason Hawkins Sold Out
Stanley Druckenmiller Sold Out
Joel Greenblatt 85,628 sh (-49.87%)
» More
Q2 2014

WEN Guru Trades in Q2 2014

John Keeley 120,000 sh (+20%)
Joel Greenblatt 88,149 sh (+2.94%)
Murray Stahl 31,863,115 sh (+2.16%)
Mario Gabelli 120,710 sh (unchged)
Jim Simons 2,764,585 sh (-34.04%)
Paul Tudor Jones 43,051 sh (-40.78%)
» More
» Details

Insider Trades

Latest Guru Trades with WEN

(List those with share number changes of more than 20%, or impact to portfolio more than 0.1%)

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
Mason Hawkins 2014-03-31 Sold Out 0.47%$8.4 - $10.19 $ 7.95-13%0
Joel Greenblatt 2014-03-31 Reduce -49.87%0.02%$8.4 - $10.19 $ 7.95-13%85628
John Keeley 2014-03-31 New Buy0.02%$8.4 - $10.19 $ 7.95-13%100000
Mason Hawkins 2013-12-31 Reduce -41.44%0.33%$8.05 - $9.23 $ 7.95-7%11054728
Joel Greenblatt 2013-12-31 New Buy0.04%$8.05 - $9.23 $ 7.95-7%170815
John Keeley 2013-12-31 Sold Out 0.01%$8.05 - $9.23 $ 7.95-7%0
Mason Hawkins 2013-09-30 Reduce -46.09%0.46%$5.86 - $8.62 $ 7.956%18878200
John Keeley 2013-09-30 New Buy0.01%$5.86 - $8.62 $ 7.956%89500
John Burbank 2013-06-30 Sold Out $5.34 - $6.14 $ 7.9537%0
Joel Greenblatt 2012-12-31 Sold Out 0.04%$4.14 - $4.81 $ 7.9578%0
John Burbank 2012-12-31 New Buy$4.14 - $4.81 $ 7.9578%10001
Joel Greenblatt 2012-09-30 Add 415.61%0.03%$4.25 - $4.8 $ 7.9575%116538
Joel Greenblatt 2012-03-31 Add 33.54%$4.69 - $5.43 $ 7.9567%26217
Leon Cooperman 2011-12-31 Sold Out 0.06%$4.45 - $5.51 $ 7.9558%0
John Keeley 2011-12-31 Sold Out 0.01%$4.45 - $5.51 $ 7.9558%0
Joel Greenblatt 2011-12-31 Add 29.56%$4.45 - $5.51 $ 7.9558%19632
Leon Cooperman 2011-09-30 Reduce -84.61%0.3%$4.42 - $5.59 $ 7.9557%470400
Joel Greenblatt 2011-09-30 New Buy0.01%$4.42 - $5.59 $ 7.9557%15153
John Keeley 2011-09-30 New Buy0.01%$4.42 - $5.59 $ 7.9557%112500
George Soros 2011-09-30 Sold Out 0.0056%$4.42 - $5.59 $ 7.9557%0
Leon Cooperman 2011-06-30 Add 693.61%0.31%$4.52 - $5.14 $ 7.9563%3057194
Premium More recent guru trades are included for Premium Members only!!
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Guru Investment Theses on Wendy's Co

Murray Stahl’s Horizon Kinetics Comments on Wendy’s Company - Jun 26, 2014

As the investing world continues to embrace indexation, it assists us in sourcing truly attractive investments in areas that are structurally overlooked (or created) by the mainstream. Wendy’s, a relatively recent purchase and significant holding, is one example.

The Wendy’s Company (WEN) has long been unloved. It is the world’s third largest hamburger-oriented quick service restaurant (“QSR”), behind McDonald’s (MCD) and Burger King (BKW). A common criticism is that it has chronically underperformed its larger peers in many key areas, particularly profit margins. Accordingly, the company “screens” poorly by nearly every quantitative measure of business performance and valuation. The stock price was essentially unchanged for 2010, 2011, and 2012. Although it has almost doubled during the past year, it is lower now than it was over 10 years ago, in 2003. However, many of our most successful investments over the past two decades have been in companies that, like Wendy’s, underperform their competitors. Operational/financial underperformance is, in fact, an opportunity, if the underlying business is fundamentally viable and an actionable plan exists to improve operating performance.

Wendy’s operating results are clearly deficient: the company’s cash operating earnings margin (before interest, tax, depreciation, and amortization) (“EBITDA”) of 14.1% can be compared with the McDonald’s and Burger King Worldwide restaurant-level margins of 35.9% and 56.4%, respectively. Yum! Brands (YUM) averages a lower margin through its KFC, Pizza Hut, and Taco Bell restaurants, but at 20.9%, it is nevertheless almost 50% more profitable than Wendy’s. One of the several reasons for Wendy’s deficiency here is the ratio of franchised restaurants to company-owned stores. The franchisee in the QSR industry typically pays 4% of gross store revenue to the parent company, the parent only being responsible for corporate overhead and limited marketing costs. Thus, this 4% revenue is a very high margin business, over 80% for both McDonald’s and Burger King Worldwide. Company-owned stores not only require much larger balance sheet commitments, but also have much lower margins that seldom exceed 20%. Only about 82% of Wendy’s stores are franchised, compared to nearly 100% at Burger King Worldwide.

The franchise/company-owned mix is not the only factor impairing Wendy’s profitability; at 1%, the company also has nearly no locations outside of the United States. McDonald’s and Burger King generate 69% and 42% of company revenue outside of North America. The mix is even higher for Yum! Brands, although this figure is inflated due to a concentration of “strategic” company-owned stores in international markets.

The untapped potential for Wendy’s is readily apparent, and although this is beginning to be recognized (i.e., the shares increased 85.5% in 2013), one can observe that considerable upside remains. Wendy’s currently trades at approximately 11.8x 2013 EBITDA, compared to 10.7x for McDonald’s, 18.0x for Burger King Worldwide, and 13.3x for Yum! Brands. The modest relative multiple assigned to McDonald’s likely reflects recognition of the market saturation that the company has achieved worldwide. Burger King Worldwide, on the other hand, has recently re-emerged as a public company after having been taken private by the esteemed private equity company 3G Capital Partners, in 2010. The current company strategy is “asset light,” as evidenced by the minimal proportion of company-owned restaurants, and is focused on international expansion (42% international revenue mix in 2013) and paying down its debt. The inflated cash flow multiple is likely in recognition of the company’s strategy and its value-oriented private equity management team. Yum! Brands also has market saturation issues to contend with, yet the high cash flow multiple may reflect the company’s early-mover status in entering various emerging markets.

Wendy’s, on merely the two sub-par ratios (franchise/company-owned store mix and absence of international presence) has superior margin and revenue expansion possibilities relative to all of these peers, yet trades at a multiple that fails to reflect this fact. Moreover, the methodological approach, popular though it is, of comparing a company’s earnings multiple to those of its peers is an error in this case. After all, with an EBITDA multiple of 11.8x, does Wendy’s seem so very much cheaper than Yum! Brands at 13.3x? The problem here, as mentioned at the beginning of this discussion, which is also the opportunity, is that the current earnings are irrelevant in this instance. One must estimate what the normalized Wendy’s earnings will be at the conclusion of its program to rebalance its franchise mix and refurbish its out-of-date stores, which is a third major factor in its valuation. That project, described below, will be a four year process at a minimum, with an important cross-over point in about four years. But Wall Street consensus earnings estimates only go as far as next year.

Accordingly, standard-time-horizon investors are unlikely to be holders of Wendy’s shares due to the lack of a tangible short-term catalyst for value realization. While it is true that there is no short-term catalyst, there is undoubtedly a catalyst. Nelson Peltz, and Peter May, along with the investment fund that they control (Trian Fund Management, L.P.) currently hold over 23% of Wendy’s shares, and Mr. Peltz acts as non-executive chairman. These two investors have extensive experience in the food and beverage industries, beginning with a 1993 activist investment in Triarc Companies (“Triarc”), which owned Arby’s franchises and Royal Crown Cola, amongst a variety of other businesses. Subsequently, through Triarc, they acquired Snapple Beverage Corp. in 1997 for $300 million, only to sell the business for a $480 million profit just three years later, after having fixed some of the management and structural problems that Snapple suffered under its prior corporate owner, Quaker Oats. Ultimately, Triarc merged with Wendy’s Corporation in 2008, creating Wendy’s Arby’s Group; however, the name was changed back to The Wendy’s Corporation in 2011, after the sale of the majority of the interest in Arby’s. A cursory review of the investment and operating history of Messrs. Peltz and May, even exclusive of the Snapple coup, reveals their capacity for exceptional shareholder value creation.

Beyond the international and franchise model initiatives at Wendy’s, management is also focused on repositioning the brand within the QSR market. This primarily involves “reimaging” stores, which essentially refers to a company-wide model to follow for modernizing stores, some of which are over 25 years old. The initial investment costs vary depending on the requisite work, but a successfully completed test period indicates 10-20% sales lift for reimaged stores, and a 25-35% increase for “scrapped” and rebuilt stores. The profit flow-through of each strategy is expected to be 40%.

However, this process is in its early stages, such that the enhanced profitability of the newly reformatted stores will be obscured by the incentives and financing that Wendy’s will provide to induce additional franchisees to participate during this phased program. The cost per store can be $0.5 million or higher. Management intends for 85% of the company-owned stores to be updated by 2017, amounting to 35% of the overall Wendy’s system. It can be presumed that the full profitability of this transition will not be reflected in the financial statements until 2018. There will come an important cross-over point when more stores will have been reformatted than those that remain, such that the latent profitability of the program will become more apparent in the financial statements.

Concurrently, Wendy’s is also engaged in a “system optimization” strategy aimed at selling 425 company-owned stores, completed a few weeks ago, for proceeds of $325 million. The incremental cash facilitated a $275 million share repurchase program, for 7.5% of its shares, completed earlier this year.

In sum, there does not appear to be any natural impediment to Wendy’s being able to achieve a profit margin closer to those of its major competitors, in which case profits could be 50% or 100% higher. It is now executing a tactical and strategic set of plans, under the direction of two activist owner-operators, to correct its deficiencies. There are several levers and sources of earnings expansion, which jointly can be very powerful in success mode, and one of the sources of return is simply the operation of the equity yield curve: that however successful the financial outcome might be, it will be too far in the future to be relevant to most investors and, thus, that as-yet-unrealized success is excessively discounted in the present.

From Murray Stahl’s First Quarter 2014 Market Commentary.

Check out Murray Stahl latest stock trades

Top Ranked Articles about Wendy's Co

Murray Stahl’s Horizon Kinetics Comments on Wendy’s Company
As the investing world continues to embrace indexation, it assists us in sourcing truly attractive investments in areas that are structurally overlooked (or created) by the mainstream. Wendy’s, a relatively recent purchase and significant holding, is one example. Read more...
Buffett Highlights the GuruFocus Real Time Picks Update
The following information is a highlight of the real-time guru activity we saw this week. To view more information on these gurus, check out their guru portfolios. “Real Time Picks” reports the stock purchases and sells that Gurus have made within the prior two weeks. If a Guru makes a purchase or sell of a company in which they own a greater-than 5% stake, SEC regulations require them to report their transaction within two days. We saw notable real time activity from Warren Buffett, Mason Hawkins and John Rogers. [b] Read more...
Wendy's Reinvents Burgers and Fries Worldwide - Top Guru Mason Hawkins Chops
Wendy’s (WEN), the fast food restaurant, is seizing expansion opportunities worldwide. The company currently has seven billionaire investors on board, net income spiked to $12.2 million in the second quarter, and a major image transformation is in the works to drive brand acceleration. At the end of second quarter 2013, Mason Hawkins was Wendy’s top guru stakeholder with 8.9% of WEN shares outstanding. But as of today, he holds 4.8% of WEN. Read more...


P/E(ttm) 28.10
WEN's P/E(ttm) is ranked higher than
72% of the 334 Companies
in the Global Restaurants industry.

( Industry Median: 30.90 vs. WEN: 28.10 )
WEN' s 10-Year P/E(ttm) Range
Min: 14.01   Max: 1380
Current: 28.1

P/B 1.67
WEN's P/B is ranked higher than
82% of the 334 Companies
in the Global Restaurants industry.

( Industry Median: 3.73 vs. WEN: 1.67 )
WEN' s 10-Year P/B Range
Min: 0.71   Max: 8.14
Current: 1.67

P/S 1.37
WEN's P/S is ranked higher than
58% of the 334 Companies
in the Global Restaurants industry.

( Industry Median: 1.20 vs. WEN: 1.37 )
WEN' s 10-Year P/S Range
Min: 0.12   Max: 1.58
Current: 1.37

PFCF 397.50
WEN's PFCF is ranked higher than
74% of the 334 Companies
in the Global Restaurants industry.

( Industry Median: 9999.00 vs. WEN: 397.50 )
WEN' s 10-Year PFCF Range
Min: 0.7   Max: 504
Current: 397.5

EV-to-EBIT 19.15
WEN's EV-to-EBIT is ranked higher than
69% of the 334 Companies
in the Global Restaurants industry.

( Industry Median: 20.11 vs. WEN: 19.15 )
WEN' s 10-Year EV-to-EBIT Range
Min: 0.1   Max: 408.3
Current: 19.15

PEG 71.00
WEN's PEG is ranked higher than
79% of the 334 Companies
in the Global Restaurants industry.

( Industry Median: 9999.00 vs. WEN: 71.00 )
WEN' s 10-Year PEG Range
Min: 0   Max: 213
Current: 71

Current Ratio 2.10
WEN's Current Ratio is ranked higher than
87% of the 242 Companies
in the Global Restaurants industry.

( Industry Median: 1.13 vs. WEN: 2.10 )
WEN' s 10-Year Current Ratio Range
Min: 0.46   Max: 9.01
Current: 2.1

Quick Ratio 2.07
WEN's Quick Ratio is ranked higher than
88% of the 242 Companies
in the Global Restaurants industry.

( Industry Median: 0.92 vs. WEN: 2.07 )
WEN' s 10-Year Quick Ratio Range
Min: 0.41   Max: 9.01
Current: 2.07


Dividend & Buy Back

Dividend Yield 2.51
WEN's Dividend Yield is ranked higher than
72% of the 218 Companies
in the Global Restaurants industry.

( Industry Median: 1.37 vs. WEN: 2.51 )
WEN' s 10-Year Dividend Yield Range
Min: 0.58   Max: 10.13
Current: 2.51

Dividend Payout 0.73
WEN's Dividend Payout is ranked higher than
67% of the 334 Companies
in the Global Restaurants industry.

( Industry Median: 2.23 vs. WEN: 0.73 )
WEN' s 10-Year Dividend Payout Range
Min: 0.15   Max: 8
Current: 0.73

Dividend growth (3y) 40.40
WEN's Dividend growth (3y) is ranked higher than
95% of the 144 Companies
in the Global Restaurants industry.

( Industry Median: 9.10 vs. WEN: 40.40 )
WEN' s 10-Year Dividend growth (3y) Range
Min: 0   Max: 40.4
Current: 40.4

Yield on cost (5-Year) 9.69
WEN's Yield on cost (5-Year) is ranked higher than
95% of the 222 Companies
in the Global Restaurants industry.

( Industry Median: 1.40 vs. WEN: 9.69 )
WEN' s 10-Year Yield on cost (5-Year) Range
Min: 2.16   Max: 37.76
Current: 9.69

Share Buyback Rate 2.30
WEN's Share Buyback Rate is ranked higher than
89% of the 228 Companies
in the Global Restaurants industry.

( Industry Median: -0.20 vs. WEN: 2.30 )
WEN' s 10-Year Share Buyback Rate Range
Min: 10.4   Max: -108.3
Current: 2.3

Valuation & Return

Price/DCF (Projected) 1.43
WEN's Price/DCF (Projected) is ranked higher than
87% of the 334 Companies
in the Global Restaurants industry.

( Industry Median: 4.87 vs. WEN: 1.43 )
WEN' s 10-Year Price/DCF (Projected) Range
Min: 0.49   Max: 14.68
Current: 1.43

Price/Median PS Value 1.64
WEN's Price/Median PS Value is ranked lower than
52% of the 334 Companies
in the Global Restaurants industry.

( Industry Median: 1.32 vs. WEN: 1.64 )
WEN' s 10-Year Price/Median PS Value Range
Min: 0.09   Max: 10.18
Current: 1.64

Earnings Yield (Greenblatt) 5.20
WEN's Earnings Yield (Greenblatt) is ranked higher than
64% of the 301 Companies
in the Global Restaurants industry.

( Industry Median: 5.70 vs. WEN: 5.20 )
WEN' s 10-Year Earnings Yield (Greenblatt) Range
Min: 0.2   Max: 1119.4
Current: 5.2

Forward Rate of Return (Yacktman) 2.29
WEN's Forward Rate of Return (Yacktman) is ranked higher than
59% of the 226 Companies
in the Global Restaurants industry.

( Industry Median: 9.37 vs. WEN: 2.29 )
WEN' s 10-Year Forward Rate of Return (Yacktman) Range
Min: -57.1   Max: 87.6
Current: 2.29


Business Description

Industry: Restaurants » Restaurants
Compare:BH, CMG, MCD, DIN, SBUX » details
Traded in other countries:TQK.Germany
Wendy's Company was reincorporated in Delaware in June 1994. Wendy's Company (formerly, through July 4, 2011, Wendy's/Arby's Group, Inc.) is the parent company of its 100% owned subsidiary holding company, Wendy's Restaurants, LLC. On July 4, 2011, Wendy's Restaurants, LLC completed the sale of 100% of the common stock of its then wholly owned subsidiary, Arby's Restaurant Group, Inc. After this sale, the principal 100% owned subsidiary of Wendy's Restaurants is Wendy's International, Inc. and its subsidiaries. Wendy's franchises and operates company-owned Wendy's quick service restaurants specializing in hamburger sandwiches throughout the United States of America. Wendy's also has franchised restaurants in 27 foreign countries and U.S. territories. At January 1, 2012, Wendy's operated and franchised 1,417 and 5,177 restaurants, respectively. Each restaurant offers a relatively standard menu featuring hamburgers and filet of chicken breast sandwiches, which are prepared to order with the customer's choice of condiments. The menus also includes chicken nuggets, chili, baked and french fried potatoes, freshly prepared salads, soft drinks, milk, coffee, Frosty desserts and kids' meals. In addition, the restaurants sell a variety of promotional products on a limited time basis. The Company or its subsidiaries have registered certain trademarks and service marks in the United States Patent and Trademark Office and in international jurisdictions, some of which include Wendy's, Old Fashioned Hamburgers and Quality Is Our Recipe. Each restaurant is in competition with other food service operations within the same geographical area. The quick-service restaurant segment is highly competitive and includes well-established competitors. Wendy's competes with other restaurant companies and food outlets, primarily through the quality, variety, convenience, price, and value perception of food products offered. The Company also competes within the food service industry and the quick service restaurant sector not only for customers, but also for personnel, suitable real estate sites and qualified franchisees. The Company's past and present operations are governed by federal, state and local environmental laws and regulations concerning the discharge, storage, handling and disposal of hazardous or toxic substances.

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