Dunkin’ Brands Group, Inc. – Value Analysis (NASDAQ:DNKN) : June 20, 2017

Capitalcube gives Dunkin’ Brands Group, Inc. a score of 53.

Our analysis is based on comparing Dunkin’ Brands Group, Inc. with the following peers – Wendy’s Company, Panera Bread Company Class A, Starbucks Corporation, McDonald’s Corporation, J. M. Smucker Company and Dean Foods Company (WEN-US, PNRA-US, SBUX-US, MCD-US, SJM-US and DF-US).

Investment Outlook

Dunkin’ Brands Group, Inc. has a fundamental score of 53 and has a relative valuation of OVERVALUED.

Fundamental Score

Access our research and ratings on Dunkin’ Brands Group, Inc.

Company Overview

  • From a peer analysis perspective, relative outperformance last month is up from a median performance last year.
  • Dunkin’ Brands Group, Inc. currently has a negative book value but its current Price/Assets ratio of 1.66 is about median among its peers.
  • DNKN-US‘s book value of equity is not positive and suggests that that it is not meaningful to analyze its ROE versus P/E in order to determine whether the company has an operating or growth advantage.
  • DNKN-US‘s relatively high profit margins are burdened by relative asset inefficiency.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • DNKN-US‘s return on assets currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.
  • The company’s relatively high gross and pre-tax margins suggest a differentiated product portfolio and tight control on operating costs relative to peers.
  • DNKN-US‘s revenue growth in recent years and current P/E ratio are both around their respective peer medians suggesting that historical performance and long-term growth expectations for the company are largely in sync.
  • The company’s capital investment seems appropriate for a business with peer median returns.
  • DNKN-US seems to be constrained by the current level of debt.

Access our research and ratings on Dunkin’ Brands Group, Inc.

Leverage & Liquidity

DNKN-US is debt-constrained.

  • With debt at a relatively high 34.38% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 27.27%), and interest coverage level of 3.93x, DNKN-US seems debt-constrained.
  • All 6 peers for the company have an outstanding debt balance.

DNKN-US has maintained its Some Capacity profile from the recent year-end.

  • DNKN-US‘s interest coverage is upward trending and is now similar to its five-year average interest coverage of 3.91x.
  • Compared to 2016, interest coverage has remained relatively stable for both the company (3.93x) and the peer median (7.62x).
  • DNKN-US‘s debt-EV continues to trend downward and is now similar to its five-year average debt-EV of 34.26%.
  • While its debt-EV decreased to 34.38% from 35.82% (in 2016), its peer median increased during this period to 27.27% from 26.02%.
  • Relative to peers, debt-EV fell 2.69 percentage points.

Access the detailed analysis for Dunkin’ Brands Group, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Wendy’s Company 45.7 2.1 2.96 8.13
Panera Bread Company Class A 7.84 0.79 28.3 75.91
Starbucks Corporation 4.61 1.23 40.83 115.57
McDonald’s Corporation 20.86 1.83 8.94 22.3
J. M. Smucker Company N/A 0.9 7.62 19.64
Dean Foods Company 33.69 1.22 3.11 33.59
Dunkin’ Brands Group, Inc. 34.38 1.61 3.93 9.95
Peer Median 27.27 1.23 7.62 22.3
Best In Class 4.61 2.1 40.83 115.57

Looking for more metrics and analysis for Dunkin’ Brands Group, Inc.?

Company Profile

Dunkin’ Brands Group, Inc. operates as a franchisor of quick service restaurants, which engages in the service of hot and cold coffee, baked goods, and ice cream. It operates through the following segments: Dunkin’ Donuts U.S., Dunkin’ Donuts International, Baskin-Robbins International, and Baskin-Robbins U.S. The company was founded on November 22, 2005 and is headquartered in Canton, MA.

Disclaimer

The information presented in this report has been obtained from sources deemed to be reliable, but AnalytixInsight does not make any representation about the accuracy, completeness, or timeliness of this information. This report was produced by AnalytixInsight for informational purposes only and nothing contained herein should be construed as an offer to buy or sell or as a solicitation of an offer to buy or sell any security or derivative instrument. This report is current only as of the date that it was published and the opinions, estimates, ratings and other information may change without notice or publication. Past performance is no guarantee of future results. Prior to making an investment or other financial decision, please consult with your financial, legal and tax advisors. AnalytixInsight shall not be liable for any party’s use of this report. AnalytixInsight is not a broker-dealer and does not buy, sell, maintain a position, or make a market in any security referred to herein. One of the principal tenets for us at AnalytixInsight is that the best person to handle your finances is you. By your use of our services or by reading any our reports, you’re agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that AnalytixInsight, its directors, its employees, and its agents will not be liable for any investment decision made or action taken by you and others based on news, information, opinion, or any other material generated by us and/or published through our services. For a complete copy of our disclaimer, please visit our website www.analytixinsight.com.