McDonald’s Corporation (MCD), The Wendy’s Co (WEN): Does Fast Food Equal Fast Money?

Wendy’s recipe for success

The Wendy’s Co (NASDAQ:WEN) finally broke out of its trading range, where it’s been stuck for three years. This mainstay for fast-foodies is offering investors a value investment along with cheap eats.

Fundamentally speaking, The Wendy’s Co (NASDAQ:WEN) just had a great earnings call. On July 23, it announced a 25% increase in the quarterly cash dividend, raising it from $0.04 to $0.05 (payable Sept. 17). The company recorded a same-restaurant sales increase and incremental sales from a higher year-over-year net number of company-operated restaurants. This was the main driver in raising operating profits by nearly $20 million from the same period last year.

The Wendy’s Co (NASDAQ:WEN) reiterated its outlook for fiscal year 2013 with an estimated EPS of $0.20 to $0.22, and also stated it is trending toward the high-end of profit margin expectations of 14.5% compared to 14% a year ago. This has driven the shareholders mad to buy this stock, as it rocketed from $5.00 to over $7.00 on high volume.

A fresh start for a old company brings positive changes

The recent positive reaction in stock price has been founded on the growth of its business. The Wendy’s Co (NASDAQ:WEN) has seen the pretzel cheeseburger explode with success and most probably will be a steady offering on The Wendy’s Co (NASDAQ:WEN) menu. This new concoction by Wendy’s chefs is such a hit, many analysts expect it to take market share from McDonald’s and Burger King’s flagship offerings, the Big Mac and Whopper, respectively.

Alongside new menu items, Wendy’s has embarked on an self-titled Image Reactivation, where the 6,500 stores will get a revamped logo and interior design. This is keeping up with the industry’s shift to make fast-food dining more luxurious and family oriented.

Conclusion

The evolving Wendy’s, diverse Yum! Brands, Inc. (NYSE:YUM), and ubiquitous McDonald’s brand bring more choices to the investment table. They are on investors’ value menu, and should be looked at closely. I feel all three will enter 2014 strong and deserve a hard look for an investor willing to ride the fast-food ebb and flows.

The article Does Fast Food Equal Fast Money? originally appeared on Fool.com and is written by Michael Mandala.

Michael Mandala has no position in any stocks mentioned. The Motley Fool recommends McDonald’s. The Motley Fool owns shares of McDonald’s. Michael is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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