I think they have a place in a diversified portfolio,steady earnings,and paying a good dividend.
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I think they have a place in a diversified portfolio,steady earnings,and paying a good dividend.
In 2010 Pizza Hut NZ was still in big trouble, and RBD shareholders were still in the shadow of their disastrous foray into Pizza Hut in Victoria. Whereas now PH sales and operating profits are increasing in absolute terms even as the store numbers decrease - a huge turnaround. So the PH growth inhibiting millstone is being ground away.
In 2010 Starbucks was still a growth story, but stores were being opened without regard to profitability. Now Starbucks is being retained as a smaller more profitable core.
Also in 2010, actual serious future growth looked to be resting on the introduction of Taco Bell, which had failed in Australia. So shareholders had a right to be sceptical and not to price in a growth premium. Nowdays with Carl's Junior, there is a clear growth path forwards that is putting runs on the board already.
IMO the implied growth premium, which has seen the PE multiple blow out from 8.8 to 16 is justified, despite no more actual net profit being earned - yet.
SNOOPY
I agree Snoopy that their prospects are improved compared to how things looked in 2010 and that Carl's Jnr probably has far wider market appeal than Taco Bell, provided they can execute with consistency.
No review of their performance and analysis of the PE expansion over the last four years can be complete without due consideration of the significant PE expansion that's occurred to the market overall.
I understand the average forward P.E of the NZX 50 is now approximately 18 a record all time high. Yes they've cleaned up their act a bit but to a large extent I think the current PE is explained by record prevailing PE's. Personally speaking I won't give my local Carl's, Pizza Hut or KFC another opportunity to disappoint and won't invest in something that I don't personally believe in unless it makes a compelling case for itself which this doesn't in my opinion. The recent sales result demonstrates some reasonable prospects but much like the menu at Carl's Jnr it looks fully priced to me for what you get....wanders off to get another excellent burger and chips from his local Chinese.
Yes its grown hasn't it. Not a great time to buy in now...SP is highest its been in quite a long time and dividend yield if you buy now is consequently not so attractive. The right time to have gotten in was some time ago. Personally its giving me almost 11% gross div yield and obviously showing good SP gain as well. Keep an eye on it periodically in your wanderings. Its definitely a holder if you can catch it at the right time.
Wow not a bad result seems people are caring less and less about their health, the SP has performed extremely well over the last few months
finger licken good all right :t_up: seen the new kfc burger on tv double chicken breasts an bacon looks bloody good although im been wondering how anyone will fit it in there mouth lol
A very good result.