1-Star Stocks Poised to Plunge: Dunkin' Brands?

Brian D. Pacampara, The Motley Fool
Updated

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, coffee shop operator Dunkin' Brands (NAS: DNKN) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Dunkin's business and see what CAPS investors are saying about the stock right now.

Dunkin'facts

Headquarters

Canton, Mass.

Market Cap

$3.6 billion

Industry

Restaurants

Trailing-12-Month Revenue

$628.2 million

Management

CEO Nigel Travis (since 2009)
CFO Neil Moses (since 2010)

Trailing-12-Month Return on Equity

6.5%

Cash/Debt

$246.7 million / $1.5 billion

Dividend Yield

2%

Competitors

Krispy Kreme Doughnuts
Starbucks
Yum! Brands


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 49% of the 210 members who have rated Dunkin' believe the stock will underperform the S&P 500 going forward.

Earlier this week, one of those Fools, RScottK26, succinctly summed up the bear case for our community:

Low [return on equity] and [return on assets]. VERY high debt and debt/equity. More mature company. Heading into slower time of year for donuts and coffee. I like [Krispy Kreme] much more in this space: almost no debt, and lots of room to grow.

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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Starbucks. Motley Fool newsletter services have recommended buying shares of Starbucks and Yum! Brands, as well as writing covered calls on Starbucks. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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