A Quick Look at Six Fast Food Restaurant Stocks

The fast-food industry is a multi-billion dollar industry with huge presence not just in the U.S. but in countries around the world. People tend to prefer fast-food whether the economy is in expansion or contraction mode. The largest fast-food giant McDonald’s (MCD) operates  more than 38,000 stores in 119 countries serving 69 million customers every single day.

Here is a brief overview of the industry:

The fast food industry, also known as Quick Service Restaurants (QSR), has been serving up tasty morsels for as long as people have lived in cities. The modern system of fast food franchising is believed to have started in the mid 1930’s when Howard Johnson franchised his second location to a friend as a means to expand operations during the Great Depression. And oh how it has grown! As cars became commonplace, the drive-thru concept brought explosive growth to the idea of food-on-the go. “Fast Food” was added to the Merrion-Webster dictionary in 1951 and U.S. fast food companies are now franchised in over 100 countries. In the U.S. alone there are over 200,000 restaurant locations! Revenue has grown from $6 billion in 1970 to $160 billion last year, an 8.6% annualized rate.

Fast food franchises focus on high volume, low cost and high speed product. Frequently food is preheated or precooked and served to-go, though many locations also offer seating for on-site consumption. For stands, kiosks or sit-down locations, food is standardized and shipped from central locations. Consumers enjoy being able to get a familiar meal in each location, and menus and marketing are the same in every location.

Source: Franchisehelp.com

Six of the fast-food stocks are listed below for consideration:

1.Company: Sonic Corp (SONC)
Current Dividend Yield: No Dividends paid

2.Company: McDonald’s Corp (MCD)
Current Dividend Yield: 3.29%

3.Company:Domino’s Pizza Inc (DPZ)
Current Dividend Yield: No Dividends paid

4.Company: Burger King Worldwide, Inc (BKW)
Current Dividend Yield: 0.90%

5.Company: Yum! Brands Inc (YUM)
Current Dividend Yield: 2.07%

6.Company: The Wendy’s Co (WEN)
Current Dividend Yield: 3.09%

Note: Dividend yields noted are as of Jan 25, 2013

Disclosure: No Positions

Wendy’s operates 6,594 restaurants in the U.S. and 27 countries worldwide. Yum Brands operates  37,000 units under the KFC, Pizza Hut and Taco Bell brands in more 120 countries. Of the six companies listed McDonald’s has more exposure to foreign countries and has the largest market capitalization.

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