EAT - Brinker International: Undervalued Despite Rising Revenue Growth
Investment Thesis
The casual-dining woes have unreasonably victimized Brinker International, Inc. (EAT). It has declined ~13.2% over the past year compared to the ~15.0% rise in the Russell 2000 Index. While its peers have seen their revenue growth declining, Brinker has gradually accelerated the sales growth amid rising comparable sales and foot traffic. Despite the falling cash flows and stagnant earnings growth, its dividend yield remains well-ahead of those of peers. However, in terms of forward PE, Brinker trades at a significant discount of ~87.1%, compared to peers.
The outlook is promising as