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

Biotech Insider Alert - $5 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!