Jack in the Box reported in late February fiscal first-quarter operating EPS above the consensus estimates, with lower selling, general and administrative expenses and tax rate driving the beat. Comparison sales tracked down 1% to 2% in the first seven weeks of the quarter but inflected after the company pivoted to a more value-oriented strategy. The Jack in the Box high-low promotion approach remains effective, with quarter-to-date comparisons running flat and improving in the past couple of weeks.
Jack in the Box shareholders are paid a 2.05% dividend. Baird has set its price objective at $93, and the consensus target price is $93. The shares closed at $76.87 apiece on Friday.
This fast-food giant does a ton of business overseas but still remains a solid pick for investors seeking dividends and a degree of safety. McDonald’s Corp. (NYSE: MCD) is the world’s leading global food-service retailer with over 37,000 locations serving approximately 69 million customers in over 100 countries each day. More than 80% of McDonald’s restaurants worldwide are owned and operated by independent local businesspersons.
McDonald’s shares have been positive recently as menu price increases and global growth fueled a strong fourth-quarter earnings report. EPS came in above the consensus forecast, though U.S. comparisons were a bit light at up 2.3%. Capital expenditures guidance for fiscal year 2019 was $2.3 billion, with just under $1 billion of that going toward 2,000 U.S. remodels.
McDonald’s shareholders receive a nice 2.57% dividend. The $196 Baird price target compares with a consensus price objective last seen at $197.69. The shares ended last week trading at $179.50.
The retail giant has traded down some recently and is offering a very solid entry point. Starbucks Corp. (NASDAQ: SBUX) operates as a roaster, marketer and retailer of specialty coffee worldwide. Its stores offer coffee and tea beverages, packaged roasted whole bean and ground coffees, single-serve and ready-to-drink coffee and tea products, juices and bottled water.
The company also licenses its trademarks through licensed stores, as well as grocery and national foodservice accounts. The company offers its products under the Starbucks, Teavana, Tazo, Seattle’s Best Coffee, Evolution Fresh, La Boulange, Ethos, Starbucks VIA, Starbucks Doubleshot, Starbucks Refreshers and Starbucks Discoveries Iced Café Favorites brand names.
Shareholders of Starbucks are paid a 2.04% dividend. The Baird price objective is $74. The posted consensus price target is lower at $69.40, about the same as the most recent close at $69.36 per share.
These four very well-known and loved brands offer investors some safety in a volatile market, and all pay decent dividends. While restaurants are very data dependent, and a deep recession could hurt traffic at some, they make good sense for investors in 2019 and beyond.