Texas Roadhouse is the better buy

Article Excerpt

TEXAS ROADHOUSE $53.53 (Nasdaq symbol TXRH; TSINetwork Rating: Extra Risk) (502-426-9984; www.texasroadhouse.com; Shares o/s: 71.8 million; Market cap: $3.8 billion; Divd yield: 2.2%) is a full-service, casual-dining chain with 591 locations spread across 49 U.S. states and 10 foreign countries. Its restaurants operate under two banners—Texas Roadhouse (566 locations) and Bubba’s 33 (25). Most outlets are company-owned restaurants. In the quarter ended June 25, 2019, sales rose 9.6%, to $689.8 million from $629.2 million a year earlier. Same-store sales increased 4.7% for company-owned restaurants and 4.3% for franchise locations in the U.S. In the quarter, Texas Roadhouse opened three more company restaurants and two international franchise locations. Despite the higher sales, overall earnings rose just 1.4%, to $44.8 million, or $0.63 a share, from $44.2 million, or $0.62, a year earlier. The modest rise reflects higher labour costs. To help hold up profits, Texas Roadhouse raised menu prices by about 1.7% in mid-November. It also raised prices by another 1.5% in early April…

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