Restaurant Stocks on the NYSE
Restaurants, arguably more than other industries, have had to adjust swiftly to a new and unrecognizable landscape during the pandemic. And the level of preparedness towards adverse and unpredictable conditions reflects in the last 12 month (LTM) stock price performance of the 18 restaurant stocks on the NYSE.
The performance for this basket of stocks ranges from a high of 90% to a low of -21%. The companies that have rewarded shareholders are at the forefront of industry trends, doubling down on a digital ecosystem through concepts like membership programs, ghost kitchens, delivery, and mobile sales.
Winners and Losers
The vast division of stock price performance has a David and Goliath component to it in that the larger companies with deeper pockets have had the ability to invest in modern initiatives.
The top five performing stocks have an average market cap of $14 billion, while the bottom five possess an average of $630 million.
|Stock||Last 12 Month Performance||Market Cap ($M)|
|Brinker International, Inc.||90.85%||$3,120|
|Shake Shack, Inc.||88.63%||$4,970|
|Chipotle Mexican Grill, Inc.||70.19%||$40,580|
|Yum China Holdings, Inc.||37.53%||$25,090|
|Darden Restaurants, Inc.||28.26%||$17,900|
|Flanigan's Enterprises, Inc.||16.10%||$44|
|Yum! Brands, Inc.||6.18%||$31,060|
|Biglari Holdings Inc.||2.90%||$356|
|Cannae Holdings, Inc.||-1.87%||$3,420|
|Restaurant Brands International, Inc.||-2.81%||$27,580|
|J. Alexander's Holdings, Inc.||-6.12%||$131|
|Dine Brands Global, Inc||-9.25%||$1,330|
|Biglari holdings (Class A)||-10.20%||$363|
|Drive Shack Inc.||-11.82%||$238|
|Arcos Dorados Holdings Inc.||-21.23%||$1,100|
Digital Haves and Have Nots
The same types of initiatives appear to be paying off, especially for the biggest winners.
- Brinker International has exceeded expectations with its ghost kitchen virtual offering—It’s Just Wings. A ghost kitchen is a restaurant optimized strictly for delivery, with a no dine-in approach and a condensed menu, they are intended to achieve higher margins.
- Shake Shack saw 60% of shack sales go digital in Q3’20. Their digital footprint is expected to grow along with their target to open 50-60 new locations in 2021.
- Chipotle’s loyalty rewards member program reached 17 million members as of late. Furthermore, digital sales grew 177% year-over-year in their fourth quarter, and nearly 50% of revenues are now derived from digital orders.
Those in negative territory have not had the same good fortune. They tend to be sit-down establishments suffering from drastic falls in foot traffic.
Without a pre-existing digital presence to reach customers, sales run the risk of taking a nosedive. Hospitality workers are among those hardest hit by the pandemic, and a lack of demand for hospitality labor again points to the dire circumstances for some sit-down restaurants.
For the food industry, the fall in foot traffic is partially offset by the rise in food delivery. Pure play companies in the food delivery space like DoorDash and Grubhub have fared well. Grubhub reported 622,700 Daily Average Grubs (daily deliveries) in 2020, up from 492,300 from the year prior. And for Uber, growth in the delivery segment of their business has buoyed the decline in ride hailing.
With the vaccine rollouts in play, the restaurant stocks on the NYSE may get a much-needed boost. But pandemic or not, the digital trends in the restaurant space will continue to shape the industry after COVID-19 just as it has done prior.
Super-Sized Bets for Football’s Big Game (2013-2022)
Expanding legalization has driven an increase in bets on football’s big game, with wagers more than doubling from 2021 to 2022. (Sponsored Content)
Super-Sized Bets for Football’s Big Game
With 99 million viewers in 2022, “more Americans tune in to the Super Bowl than any other television broadcast.” Its large viewership, combined with expanding legislation, has led to ballooning wagers.
In this graphic sponsored by Roundhill Investments, we show how these bets have grown over the last 10 years.
Annual Legal Bets on the Big Game
From 2013 through 2018, sports betting was only legal in Nevada and year-over-year growth was low. However, when the federal sports betting ban was lifted in May 2018, more states started allowing bets.
By 2022, 33 states plus Washington, DC were legally able to bet on the game. Wagers climbed quickly as a result.
|Year||Total Bets||Annual Growth|
Data only for states that report bets on football’s big game, see graphic for full list of states included in 2022.
Impressively, legal bets surpassed the $1 billion mark in 2022. Growth was primarily driven by New York State legalizing online sports betting, with the state contributing nearly $500 million to the total.
Since the New York State Gaming Commission does not report event-specific totals, we have estimated this amount based on sports bets made the week leading up to and including the date of the big game.
Investment Exposure to an Emerging Industry
Due to legalization, bets on football’s big game have grown 10 times larger over the last decade. A further shift away from bookies and toward legal operators appears to be likely. In September 2022, 89% of Americans said it was important to bet with a legal operator this NFL season, up from 76% in February 2022.
For legal operators, this could translate into revenue opportunities. Companies that take legal bets reported more than $62 million in revenue from the big game alone in 2022, a 37% jump from the prior year.
Looking for exposure to the growing sports betting industry? Explore Roundhill’s sports betting ETF, $BETZ.
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