3 Reasons to Sell Tim Horton Inc. (USA)’s (THI)

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Dunkin Brands Group Inc (NASDAQ:DNKN) also boasts an excellent expansionstory with plans to double its store count over the next 20 years. The company has only 130 locations in the western United States and management estimates there’s room for over 5,000 new stores. In addition, Dunkin has reported stellar operating results, posting 7% same store sales growth with the introduction its new breakfast sandwiches.

Foolish bottom line

There’re hints that Tim Horton’s may be turning away from its aggressive growth posture. Last week the company announced a 24% dividend payout hike and a $250 million share buyback. Returning capital to shareholders may be the best strategy in the long run as the company runs out of expansion opportunities. However, the transition from a growth to income stock will require a large downward revaluation.

The article 3 Reasons to Sell Tim Horton’s originally appeared on Fool.com and is written by Robert Baillieul.

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