Personal consumption spending has been growing at almost half the rate in the 21 quarters since the trough of the Great Recession, compared to the average growth rate over the same period in prior recessions. Consumer spending on discretionary services, such as eating out at restaurants, has had sub-par growth. For a restaurant business to show growth in a weak economy, it must take away business from other restaurants. In such a state of consumer restraint, only a few restaurant chains can be successful in growing revenue. That being said, there are still good investments in the restaurant industry. Let’s take a look at which restaurants TheStreet Quant Ratings says you should add to your portfolio right now. Number 3 is Papa John’s Pizza. With an ‘A-‘ rating, the company’s strengths can be seen in its revenue growth and increase in net income. 2nd is, Texas Roadhouse. This rating is an ‘A-.’ Texas Roadhouse thrives in its growth in earnings per share and solid stock price performance. Number 1 is Cracker Barrel. With an ‘A+’ rating the company flourishes in its revenue growth and notable return on equity. TheStreet Ratings are algorithmic stock picks based on 32 major data points. S&P 500 stocks rated ‘buy’ yielded a 16.5% return in 2014, beating the S&P 500 Total Return Index by more than 300 basis points. For the full reports on these stocks, you can check out TheStreet.com/QuantRatings.
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