In light of DoorDash, a Palo Alto, California-based food-delivery company, raising $400 million in equity financing, five restaurants that have outperformed the Standard & Poor’s 500 Index by over 10% during the past six months are Chipotle Mexican Grill Inc. (CMG, Financial), Domino’s Pizza Inc. (DPZ, Financial), Papa John’s International Inc. (PZZA, Financial), Wingstop Inc. (WING, Financial) and Yum China Holdings Inc. (YUMC, Financial) according to the All-in-One Screener, a Premium feature of GuruFocus.
DoorDash boosts equity valuation to $16 billion as coronavirus continues trampling the globe
As Covid-19 cases around the globe exceed 8.5 million according to Johns Hopkins University statistics, DoorDash secured on Friday $400 million in equity capital through sales of shares to mutual funds like T. Rowe Price Group Inc. (TROW, Financial) and Fidelity, boosting the food-delivery company’s equity valuation to approximately $16 billion. According to data-research platform Edison Trends, DoorDash took a 45% market share of food-delivery transactions in April, besting Uber Inc. (UBER, Financial) subsidiary UberEats’ 28% market share.
Edison Trends also reported that food-delivery industry sales increased over 51% since March as governments worldwide enacted shelter-in-place orders to curtail the spread of the coronavirus.
As such, investors might seek opportunities in restaurants with food-delivery capabilities. The All-in-One Screener listed six restaurants that have outperformed the S&P 500 by at least 10% over the past six months.
Chipotle
Chipotle, a major holding of Bill Ackman (Trades, Portfolio)’s Pershing Square, outperformed the S&P 500 by approximately 28.56% over the past six months.
The Newport Beach, California-based company operates fast-casual restaurants that serve burritos, tacos, bowls and salads. GuruFocus ranks Chipotle’s profitability 8 out of 10 on several positive investing signs, which include a three-year revenue growth rate and a return on equity that it outperforming over 85% of global competitors.
Other gurus with holdings in Chipotle include Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Spiros Segalas (Trades, Portfolio).
Domino’s Pizza
Domino’s Pizza has outperformed the S&P 500 by approximately 36.64% over the past six months.
The Ann Arbor, Michigan-based company franchises stores that engage in quick-service pizza. GuruFocus ranks the company’s profitability 9 out of 10 on several positive investing signs, which include a high Piotroski F-score of 7, a three-star business predictability rank and profit margins that are outperforming over 90% of global competitors.
Papa John’s
Papa John’s has outperformed the S&P 500 by approximately 36.55% over the past six months.
Like Domino’s, Papa John’s also franchises pizza delivery and carryout restaurants. According to GuruFocus, the Louisville, Kentucky-based company has a moderately strong Piotroski F-score of 6 despite margins and returns underperforming over 52% of global competitors.
Wingstop
Wingstop has outperformed the S&P 500 by approximately 46.58% over the past six months.
Wingstop operates and franchises stores that specialize in selling chicken wings in a wide range of flavors. GuruFocus ranks the Dallas-based company’s profitability 8 out of 10 on the back of profit margins outperforming over 88% of global competitors and a three-year revenue growth rate near a 10-year high of 24.60%.
Yum China
Yum China has outperformed the S&P 500 by approximately 10.29% over the past six months.
The Shanghai-based company operates and franchises restaurants across China through brands like Pizza Hut, Little Sheep, East Dawning and Taco Bell. GuruFocus ranks the company’s profitability 6 out of 10: Three-year revenue and earnings growth rates are outperforming just over 61% of global competitors despite expanding operating margins and returns outperforming over 85% of global restaurants.
Disclosure: No positions.
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