Fast-food employees across the Midwest and in New York City are striking for higher wages, according to The New York Times. Targeting the fast-food industry as a whole, disgruntled workers are organizing walk-outs and pickets to coordinate with major meal times. Described as a kind of Occupy movement, the workers are requesting a pay raise up to $15 an hour – a pretty significant increase over the current average, which hovers between $8 and $9 dollars per hour depending on the restaurant.
McDonald's (MCD) own "sample budget" – which it distributes to employees to educate them about responsible saving – outlines a budget which includes taking on a second job, indicating that even the companies themselves do not expect workers to be able to make a living wage by flipping burgers alone.
However, a new study from Bloomberg is suggesting that the worker demands are unsustainable, and would cut too deeply into company profit margins in order for them to stay in business. Raising compensation to $15 an hour would require raising prices by as much as 25%. Since fast-food is so cheap to begin with, this would mean an extra cost for consumers of just 25 cents for a burger or a dollar menu item. But restaurateurs worry that such an increase would drive away customers.
Investors in the restaurant industry aren't being hurt too badly by the negative press, McDonald's shareprice for example declined by only 0.1%. However, there is certainly a strong call for change, as echoed by President Obama's deliberations about raising the minimum wage. We decided to run a screen on stocks using our partner CSR Hub, and limited the universe to fast-food companies who are above the average rating for employee compensation within their industry (50).
We were left with five stocks on our list.
For an interactive version of this chart, click on the image below. Average analyst ratings sourced from Zacks Investment Research.
Do you consider these fast-food names to be worthwhile investments? Use the list below as a starting point for your own analysis.
CSR Hub Employee Rating: 60/100
2. Buffalo Wild Wings Inc. (BWLD, Earnings, Analysts, Financials): Engages in the ownership, operation, and franchise of restaurants in the United States. Market cap at $1.94B, most recent closing price at $103.58.
CSR Hub Employee Rating: 51/100
CSR Hub Employee Rating: 54/100
4. Tim Hortons Inc. (THI, Earnings, Analysts, Financials): Develops, franchises, and operates quick service restaurants primarily in Canada and the United States. Market cap at $8.85B, most recent closing price at $57.83.
CSR Hub Employee Rating: 53/100
5. Domino's Pizza, Inc. (DPZ, Earnings, Analysts, Financials): Operates as a pizza delivery company in the United States and internationally. Market cap at $3.47B, most recent closing price at $62.58.
CSR Hub Employee Rating: 53/100
(List compiled by James Dennin. All data sourced from Finviz.)
Analyze These Ideas: Getting Started
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Dig Deeper: Access Company Snapshots, Charts, Filings
- Dunkin' Brands Group, Inc.(DNKN, Chart, Download SEC Filings)
- Buffalo Wild Wings Inc.(BWLD, Chart, Download SEC Filings)
- The Wendy's Company(WEN, Chart, Download SEC Filings)
- Tim Hortons Inc.(THI, Chart, Download SEC Filings)
- Domino's Pizza, Inc.(DPZ, Chart, Download SEC Filings)
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