Dunkin Brands Group Inc (DNKN): Why You Should Buy Now

The company, under the legendary leadership of CEO Howard Schultz, is growing earnings at an impressive 20% rate as the company continues it international expansion. The company is posting strong same-store sales growth through the introduction of new food and beverage items. In addition, Starbucks is better positioned to expand margins due to falling coffee prices.

My only slight criticism of Starbucks: valuation. The stock trades at a premium 23.5 times forward earnings and boasts a slightly higher 1.1 PEG ratio.

5) Rewarding shareholders

Last quarter management raised the dividend 27% giving the stock an industry leading 2% yield.

The dividend is safe with the company only paying out about 20% of profits. Investors should expect the dividend to rise in-line with the company’s 15% earnings growth.

Foolish bottom line

Dunkin’ Brands definitely meets my criteria of a great growth stock: visible growth, reasonable valuation, and a nice dividend.

The article 5 Reasons to Buy Dunkin’ Brands originally appeared on Fool.com and is written by Robert Baillieul.

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