Summary
- Dunkin' Brands Group has consistently grown revenue, profits, and dividends since its IPO in 2011.
- The company owns the second largest global single-serve coffee business in Dunkin' and the largest ice cream shop chain in Baskin-Robbins.
- Dunkin' Brands Group is very shareholder-friendly returning cash through share buybacks and growing dividends.
- But the company is overvalued, in my opinion, based on P/E ratio, and I am waiting for a better entry point.
Overview and Thesis
In this article, I discuss Dunkin' Brands Group (DNKN), which owns the second largest global single-serve coffee business and also the world's largest chain of ice cream shops. The company is increasing revenue and EPS that is leading to solid shareholder returns. The company's capital-light business model generates relatively high FCF and thus a growing dividend and share buybacks. But due to the smaller market capitalization of roughly $6B and shorter dividend history, the stock may not be on the radar of many dividend growth investors. But saying that, the market has recognized the company's advantages. I outline below why I think that Dunkin' Brands Group is overvalued now and small investors should wait for a better entry point.
Dunkin' Brands Group Owns The Second Largest Global Single-Serve Coffee Business And Also The World's Largest Chain Of Ice Cream Shops
Source: bakingbusiness.com
