Thursday, January 08, 2015

McDonald’s and Dunkin’ Donuts Giving Away Free Coffee: Will this Help the Coffee Stocks?

In certain parts of the country, caffeine addicts will be able to get their fix for free at McDonald’s (MCD) and Dunkin’ Donuts (DNKN). What a great way to start off the week. But will it help either of the companies? The offer should attract many customers.

There are several companies that can be considered to be coffee stocks, according to the free list of coffee companies at  There are the roasters such as Green Mountain (GMCR), and the food conglomerates like Kraft which owns Maxwell House (KRFT). But the retailers may be where the money is.

Let's look at Dunkin' Brands Group, Inc. (DNKN). The stock trades at 27 times trailing earnings and 22 times forward earnings. Earnings were up 36% for the latest quarter on a 3.4% rise in revenues. The company reports February 5. The current yield on the stock is 2.2%.

McDonald’s (MCD) have a trailing price to earnings ratio of 19 and a forward PE of 17. Latest quarterly earnings were down 29.8% on a 4.6% drop in sales. The company will be reporting earnings on January 23. The dividend yield is 3.7%.

Of course, Starbucks (SBUX), the largest coffeehouse retailer in the world. The stock trades at 30 times earnings and yields 1.6%.

If you are looking for additional companies in the coffee business, check out the list of coffee stocks at

Disclosure: Author owns MCD. 


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