Chipotle Mexican Grill, Inc. (CMG), Panera Bread Co (PNRA): Are These Fast-Casual Restaurants a Buy?

Page 1 of 2

Americans are becoming increasingly aware of the health issues facing the country and the need for a healthy lifestyle.  At the same time, we are constantly on the move and require the convenience of fast-food dining. While fast food is synonymous with burgers and fries, and the antithesis of healthy dining, fast- casual restaurants have burst on the scene. These restaurants offer a higher quality, healthier product at a similarly reasonable price. We look at two fast-casual restaurants that have been very successful to determine if they are still great investments at current price points.

Chipotle Mexican Grill, Inc. (NYSE:CMG)

Quick Mexican dining

Chipotle Mexican Grill, Inc. (NYSE:CMG) exploded onto the fast-casual dining scene 20 years ago, and now operates 1,450 restaurants around the country with 12 stores in Canada and Europe. The company offers a relatively simple menu of burritos, burrito bowls, tacos, and salads. Customers have a choice of four proteins and various accompaniments served fresh in an assembly line fashion. The company also makes a strong effort to find quality and sustainable ingredients, sourcing produce from local farmers and buying meat and dairy from livestock raised in a responsible way.

Chipotle Mexican Grill, Inc. (NYSE:CMG) saw impressive growth in 2012 as the company opened 190 new restaurants. Revenue increased by more than 20% from the prior year and comparable-restaurant sales growth was 7.1%.  Chipotle Mexican Grill, Inc. (NYSE:CMG) plans to open between 165 and 180 new restaurants in 2013.

A chain alternative to the local deli

Panera Bread Co (NASDAQ:PNRA) is another fast-casual dining option that has grown quickly.  Panera currently operates or franchises 1,652 bakery-cafes in the United States and Canada. It offers a variety of fresh baked goods as well as sandwiches, salads, and soups. Panera bakes all of its own brands and offers a variety of healthy dining options. The company even has a secret menu that offers diners the healthiest of options if they know to ask for them.

Panera Bread Co (NASDAQ:PNRA) also demonstrated impressive growth with 2012 EPS growth of 27% versus the prior year on comparable bakery-cafe sales growth of 6.5%.  Panera Bread Co (NASDAQ:PNRA) opened 123 new bakery-cafes during the year; a record number of new openings for the company.

Pricing in the Growth

Chipotle Mexican Grill, Inc. (NYSE:CMG) and Panera Bread Co (NASDAQ:PNRA) have enjoyed very strong growth over the past few years, and their current P/E ratios reflect that growth. Chipotle Mexican Grill, Inc. (NYSE:CMG) trades at a trailing P/E of nearly 39.5 while Panera Bread Co (NASDAQ:PNRA) is at about 30.8. Looking forward, Panera Bread Co (NASDAQ:PNRA) is trading at 23.1 times 2014 earnings and Chipotle Mexican Grill, Inc. (NYSE:CMG) is at 28.5 times.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!