Is Yum! Brands, Inc. (YUM) A Short?

Chipotle Mexican Grill, Inc. (NYSE:CMG) managed to continue growing throughout the economic downturn, and opened 155 to 165 new stores in 2012. For 2013, the company looks to open some 165 to 180 restaurants. The other positive for the company is its international expansion plan. The company plans to open ten international stores this year: four in Canada, five in London and one in Paris. The company also sees more opportunities in Europe, namely the UK, Germany and France. Chipotle’s business model also offers robust high operating margins when compared to competitors.

Although Chipotle has avoided the uncertainty and decline in China, the company opened an Asian themed restaurant called ShopHouse Southeast Asian Kitchen in Washington, D.C. in 2011. The concept has performed well, and Chipotle plans to open yet another ShopHouse in D.C. and one in L.A. during 2013. It appears that Chipotle might be one of the best positioned fast food stocks, and this includes the fact that it has the best expected earnings growth:

Earnings growth (5-year expected)

Yum! 12%
Jack in the Box 13%
Wendy’s 16%
Burger King 18%
Chipotle 20%

Another reason I like Chipotle is its superior balance sheet:

Debt to equity

Yum! 137%
Jack in the Box 93%
Wendy’s 74%
Burger King 260%
Chipotle 0%

Don’t be fooled