Hankering to Invest in Subway? Here's the Thing...
Sandwich chain Subway has more locations than any other quick-service or fast-food restaurant chain in the United States, but an investment in the company is impossible. The parent company, Doctor's Associates, is private.
For those wanting to bet on the continued dominance of fast-food in America, here are the next best options.
Biggest fast-food chains in the U.S.
Which ones are a buy?
Over the last few years, the battle over Americans' dining-out budget has heated up. Restaurant companies have been rapidly expanding their store counts, and that has started to erode traffic at existing locations. The reason? Eating out demand hasn't grown as much as restaurant supply.
Despite that, though, the above mentioned restaurant juggernauts still boast solid investor returns. These fast-food businesses offer a range of options to suit investor needs, from stable dividend payers to fast-expanding names.
Of these, McDonald's and Domino's are worthy of specific mention. McDonald's may already be the world's largest burger joint, but it is still finding room to grow internationally. In its last quarter, same-store sales in high-growth markets were up 6.2%, led by China. Foundational markets, which include 80 of the highest-growth countries spanning the globe, had a same-store sales increase of 10.2%. Paired with a resurgent interest in the brand in the U.S., McDonald's looks like a great pairing of stability and supplemental growth from overseas.
Domino's is a similar story, boasting one of the world's largest delivery and take-out operations. The company doesn't boast the same dividend yield as McDonald's, but it makes up for that in high growth. Global sales were up 14.5% in the last quarter through a combination of new store openings, U.S. same-store sales growth of 8.4%, and international same-store sales growth of 5.1%.
With plenty of other big name options to choose from, many of which are still finding ways to get bigger, you don't need Subway to capitalize on America's persisting reliance on fast-food.
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Nicholas Rossolillo has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares) and Starbucks. The Motley Fool recommends Dunkin' Brands Group. The Motley Fool has a disclosure policy.