Yahoo Finance Is Brinker International, Inc. (EAT) a Strong Buy in 2024?
We recently compiled a list of the 11 Best Ice Cream Stocks to Invest In 2024. In this article, we are going to take a look at where Brinker International, Inc. (NYSE:EAT) stands against the other ice cream stocks.
Regarded as the most favorite dessert globally, ice cream has its popularity game quite high in the U.S. as well, where it leaves an impact of a massive $11.4 billion every year, while, at the same time, giving out $1.9 billion in direct wages, according to IDFA! Also, the U.S. saw 1.3 billion gallons of ice cream getting produced in the country in 2023, showcasing the dessert’s staggering popularity in the country. For all the ice cream lovers, we have also curated a list which you can view to see all the best ice cream brands in the U.S. so that you can fulfill all your ice cream cravings in the best way!
In addition to this, average per capita consumption in the country amounts to over 4 gallons every year, and with a huge population of 341 million, that’s quite a lot of consumption! In terms of consumption, New Zealand, the U.S., and Australia are the 3 countries that top the charts, with per capita annual consumption rates of 28.4 liters, 20.8 liters, and 18.0 liters, respectively!
As such, the global ice cream industry is racing quickly toward the sky, as, after sitting at the $76.1 billion mark in 2023, it’s on its way to hitting $132.3 billion in 2032. That boasts a CAGR of 6.7%, which is quite staggering, according to Fortune Business Insights. Ice cream-making giants like Ben & Jerry's, Wall’s, Magnum, to name a few, dominate the global ice cream industry with a market share of 20%.
Also check out 15 largest Ice Cream Companies in the World.
Moving on to recent shifting trends of the industry, one interesting trend that has emerged related to flavors, wherein, plant-based and vegan ice creams are growing in popularity. As reported by Straits Research, the global vegan ice cream market size is expected to expand from its market size figure of $623.63 million in 2022 to $984.16 million by 2031, boasting a CAGR of 5.2%. Furthermore, ice creams are planned to be given a new touch by the makers by bringing in the element of spice in ice creams! Crazy, right? In Germany, it is reported by Tetrapak that 34% of ice cream consumers are keen on trying out ice cream flavors with spice in them.
With these innovations emerging, the global ice cream industry is expected to generate over $100 billion in the coming decade, and with the given demand stats we discussed above, it’s quite certain how the ice cream market is one to look at in 2024 and the coming years. Hence, here we are going to discuss 11 Best Ice Cream Stocks to Invest In 2024 so that one can capitalize on the booming times to come in the ice cream industry.
Methodology
To curate our list of 11 Best Ice Cream Stocks to Invest In 2024, we gathered a list of all companies with a significant presence in the ice cream industry. We then further narrowed down on the basis of their upside potential and ranked the finest remaining companies by their number of hedge fund holders as of Q1, 2024, using Insider Monkey's database that tracks the activity of 920 hedge funds. For stocks with equal number of hedge fund holders, we used their upside as the tiebreaker.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A Chili's Grill & Bar restaurant filled with happy customers enjoying a meal.
Brinker International, Inc. (NYSE:EAT)
Number of Hedge Fund Investors’ holdings: 31
Brinker International, Inc. (NYSE:EAT) is a restaurant chain that owns brands like Chili's® Grill & Bar, Maggiano's Little Italy and It’s Just Wings.
For the quarter ending 31 March 2024, the company posted an operating margin of 14.2%, which is an 80-basis point uptick on a year-over-year (YoY) basis. On the other hand, the EBITDA for the quarter was recorded at $122 million, with year-to-date EBITDA seeing an increase of 31% to $302 million.
As of Q1, 2024, 31 hedge funds that Insider Monkey tracks have a stake in the company, comprising a value worth $391.8 million. Holocene Advisors has the largest interest in the stock, with an invested value being $134 million. 10 out of 19 analysts are of the “hold” opinion, putting faith in the company’s plans to up its financial position, as stated in the following comments by Brinker International:
“Our significantly improved cash flow generation gives us more flexibility to reinvest in our brands while also reducing leverage to strengthen our balance sheet and manage borrowing costs. For the quarter, we recorded approximately $50 million of capital expenditures, with a focus on capital improvements to existing restaurants, updating IT systems, reimages at both brands, and new restaurant development. We opened two new restaurants during the quarter, both of which are off to great starts, averaging more than $100,000 in weekly sales, nicely above Chili’s brand average. These, along with our new openings earlier in the fiscal year, continue to demonstrate a good guest appetite for Chili’s coming to their specific market.”
Overall EAT ranks 6th on our list of the best ice cream stocks to buy. You can visit 11 Best Ice Cream Stocks to Invest In 2024 to see the other ice cream stocks that are on hedge funds’ radar. While we acknowledge the potential of EAT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than EAT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
