Cracker Barrel CBRL

[fenders53]

Anyone own this restaurant stock?  Dividend over 3% looks good and somewhat stable financials.  Stock price volatile enough that some patience looks prudent.  They report earnings early next week and some are not confident. Perhaps a dip is coming soon? Already down some today because they have many stores in hurricane path.  That's a one quarter problem as they obviously have insurance. 

I'll likely add a second restaurant eventually but not liking the price and PE for MCD and YUM right now.   Other recommendations will be researched if you have suggestions.

[EricL]

(09-14-2018, 12:05 PM)fenders53 Wrote: Anyone own this restaurant stock?  Dividend over 3% looks good and somewhat stable financials.  Stock price volatile enough that some patience looks prudent.  They report earnings early next week and some are not confident. Perhaps a dip is coming soon? Already down some today because they have many stores in hurricane path.  That's a one quarter problem as they obviously have insurance. 

I'll likely add a second restaurant eventually but not liking the price and PE for MCD and YUM right now.   Other recommendations will be researched if you have suggestions.

I've owned CBRL since 2013 and am quite happy with it. Seems to have conservative management and hasn't had a year of negative EPS growth since 2007. Keep in mind it pays a special dividend every year on top of the regular dividend, so the yield is actually higher than what it shows if you are holding it for the long term.

Darden Restaurants (DRI) and Starbucks (SBUX) are two others to consider.

[fenders53]

That's for the feedback Eric.  I am going to make a serious attempt at an entry.  I've done enough research to know they miss earning expectations now and then as most restaurants do.  That doesn't discourage me as long as the general trend is up which it seems to be.  I'll listen to the conference call and maybe catch a brief over-reaction in the stock price.  I see they opened their first restaurant in CA.  It will be interesting to see if the menu plays well there.  That's a large new market if it does.

SBUX looks interesting on a market pullback. One of those stocks I should have purchased 20 years ago.

[fenders53]

They sure got beat up for a flat earnings report. Glad I decided to take the wife there for dinner and "stock research" a few nights ago before I purchased. I'll look for an entry point when it gets oversold. Probably sell a put. CBRL isn't going away but looks like they will have to revisit their growth plan. No growth doesn't work for the markets. I love the old country story theme but I suppose it's getting a little stale for continued growth. I don't really understand restaurants. MCD puts a new cheeseburger on sale or launches iced coffee and seemingly grows for decades.

[Kerim]

I can't help but think of CBRL as a niche player. I work two blocks from one, and nobody at my office EVER suggests heading over to there. We'll drive right by it on our way to Red Robin or Chipotle or (shudder) Applebees. MCD, on the other hand, seems to appeal to a MUCH broader audience.

[fenders53]

A niche player for sure. Always has been. I really enjoy CBRL but not everyone likes biscuits and gravy, cornbread and turnip greens like I do. Most of their stores are located where they are for a reason. And it's not fast food anyway. I dine at MCD when I have no other option. That said I don't know too many kids below the age of 12 that don't love MCD and that drives family dining decisions. That is much of their secret sauce IMO. I was researching MCD recently for their overseas expansion plans. Saw they were a complete bust in Viet Nam while KFC thrives. MCD does fine in many other Asian countries. That is news that would never be obvious to me in advance. Restaurant chains are tougher to grow once the new is worn off and you already have 1,000 stores. I believe CBRL has been fairly big for 25 years now. Maybe the expansion and growth days are over.