These Restaurant Giants Perform About Equally, So Which One is Better? - Cramer
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With the U.S. showing better economic growth recently, more Americans are likely to return to restaurant dining as sentiment improves. Stock guru Jim Cramer recently pitted two well-known names against each other to see which one might be the better play on sector growth.
Red Robin Gourmet Burgers (Nasdaq: RRGB) and Bloomin' Brands (Nasdaq: BLMN) both have a slice of the American dining segment. While Red Robin has 475 locations, Bloomin' Brands' Outback Steakhoue and Carrabba's Italian Grill spot 1,471 locations in the U.S.
Cramer points out that, amid the size difference, Red Robin has 4 percent growth compared with 2 percent for Bloomin'. Both companies are tied when it comes to comparable-store sales, each reporting gains in the low-single-digit range. He said Red Robin might have a near-term advantage with its domestic exposure, but Bloomin's international ties might make it a better long-term play.
Comparing the two stocks, Cramer noted that Red Robin is going for 22 times expected earnings with a 9.5 percent growth rate. By comparison, Bloomin' is at 18 times earnings with a growth rate around 17 percent. Red Robin is trading for 2.3 percent times its growth rate while Bloomin' is flat at one time its growth rate.
Cramer said that stocks get risky when going for more than twice growth expectations. Both are trading higher on Tuesday's session.
Red Robin Gourmet Burgers (Nasdaq: RRGB) and Bloomin' Brands (Nasdaq: BLMN) both have a slice of the American dining segment. While Red Robin has 475 locations, Bloomin' Brands' Outback Steakhoue and Carrabba's Italian Grill spot 1,471 locations in the U.S.
Cramer points out that, amid the size difference, Red Robin has 4 percent growth compared with 2 percent for Bloomin'. Both companies are tied when it comes to comparable-store sales, each reporting gains in the low-single-digit range. He said Red Robin might have a near-term advantage with its domestic exposure, but Bloomin's international ties might make it a better long-term play.
Comparing the two stocks, Cramer noted that Red Robin is going for 22 times expected earnings with a 9.5 percent growth rate. By comparison, Bloomin' is at 18 times earnings with a growth rate around 17 percent. Red Robin is trading for 2.3 percent times its growth rate while Bloomin' is flat at one time its growth rate.
Cramer said that stocks get risky when going for more than twice growth expectations. Both are trading higher on Tuesday's session.
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