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Highest Earnings Yield in the Restaurants Industry Detected for Krispy Kreme Doughnuts (KKD, CEC, FRS)

Published on Tue, 02/26/2013 - 11:22
By Robert Cotter

Below are the three companies in the Restaurants industry with the highest earnings yields. Earnings yield is useful to compare the relative benefit of owning a stock vs. owning other yield assets such as bonds. If the earnings yield is higher, stocks may be considered undervalued.

Krispy Kreme Doughnuts (NYSE:KKD) is highest with an earnings yield of 17.6%. Krispy Kreme Doughnuts, Inc. owns, operates, and franchises retail stores that sell doughnuts. The Company operates its stores under the Krispy Kreme name and specializes in making doughnuts, including their Hot Original Glazed. Krispy Kreme fully displays the production process, also known as the doughnut making theater.

There is potential upside of 7.8% for shares of Krispy Kreme Doughnuts based on a current price of $12.68 and an average consensus analyst price target of $13.67. The stock should discover initial support at its 50-day moving average (MA) of $11.54 and subsequent support at its 200-day MA of $8.22.

CEC Entertainment (NYSE:CEC) is next with an earnings yield of 8.8%.

Finishing up the top three is Frisch's Restaurants (AMEX:FRS), with an earnings yield of 8.4%.

By Robert Cotter