What Lower Calories Can Do For Your Wealth: The Wendy’s Company (WEN), Brinker International, Inc. (EAT)

An interesting report came out recently. It was by the Hudson Institute Obesity Solutions Initiative, and it dealt with how restaurants can bring lower-calorie meals to their customers. Interesting reading if you’re into that sort of thing.

But the most interesting part of the report concerns the study on how restaurants do better when they begin offering healthier, lower calorie meals on their menus. The research – which surprised me – shows that when restaurants offer healthier items they actual see better sales and traffic. Again, color me surprised. If you’ve been following along you’ll know that I’ve managed to lose more than 100 pounds in the last year or so, and I largely got that way by eating fast food and other low-health food choices.

I’m cheered that the research shows that, by offering more healthier choices, chain restaurants can do better for their customers and themselves. It’s counter to the oft-made portrayal of American’s and lazy couch potatoes slathering gravy all over everything.

Anyway, I thought I’d use the report as a springboard to get my readers thinking about investing in restaurants. It appears, from the report, that restaurants with more healthy options grew their sales at a 5.5% rate, while stores that did not saw their sales decline by a similar amount. Those are good numbers to have. If an investor is aware of them it makes choosing which restaurants to invest in a much easier proposition.

McDonald’s Corporation (NYSE:MCD)

I know it seems silly to mention McDonald’s in a column on healthy investing, but the chain has been making an effort in that direction with its new ‘Favorites Under 400’ low calorie menu. While I can’t say that everything on the menu is healthy, the fact that the firm is making the effort indicated good things for the future, according to the Hudson report. The company has seen some bad news recently, but overseas growth seems to be taking off, with margins in Europe growing 5%. Shares are up more than 10% since November, and the company also raised its dividend 10% during that time. I think that it’s a buy.

Darden Restaurants, Inc. (NYSE:DRI)

Olive Garden is owned by Darden Restaurants, which also owns Red Lobster, Longhorn Steakhouse, Capital Grille, and several other chains and franchises. Looking at the nutritional info for Olive Garden, I don’t see a lot to build confidence. Only two entrees qualify as ‘healthy’ under the terms of the study (fewer than 500 calories), and we shouldn’t even discuss the never-ending pasta bowls. The stock floated between $50 and $55 most of the year before it took a tumble in December on bad earnings expecations. In December the chain announced diluted net earnings. On the other hand, the EPS is still positive and the dividend is now a stratospheric $4.24. Only buy if you really want the dividend, but otherwise avoid.