Cramer: Could This Company Generate Monster Gains?

After talking with the CEO, Jim Cramer thought this stock could be pretty tasty.

And not only because their donuts are craved by millions who enjoy sweet treats.

Nope, the Mad Money host was impressed by the latest earnings report in which Dunkin' Brands said its fourth-quarter net income nearly tripled as more customers headed to its shops and spent money.

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Looking at the numbers a little more closely, Dunkin' Brands Group Inc. earned $34.3 million, or 32 cents per share, for the quarter ended Dec. 29. That compares with $11.6 million, or 10 cents per share, a year earlier.

Also, at Dunkin' Donuts shops in the U.S. open 54 weeks or more, sales climbed 3.2 percent in the quarter.

Immediately Cramer said, "Could Dunkin' Brands be the next Domino's, a restaurant stock that has given us monster multi-year gains for three straight years since 2010?" I'm thinking that's a definite possibility after the quarter."

But it's not just the past results that Cramer finds remarkable. It's also the future growth. For fiscal 2013, Dunkin expects revenue to climb 6 to 8 percent. In part that's due to the company's plans to expand.

Jim Cramer

"The core donut business is mostly concentrated on the east coast of the United States," Cramer explained. "But they're now making major strides by expanding west of the Mississippi river, especially in California, which got its first Dunkin' Donuts just last year."

That means that despite the more than 10,000 existing Dunkin' Donut stores, this company has room to grow. "And because all of their stores are franchise operations, putting up new units isn't particularly expensive, since Dunkin' isn't the one paying for the real estate."

And Cramer likes something else.

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The company also will pay a first-quarter dividend of 19 cents per share, which is a 27 percent increase over the payout in the previous quarter. It will be paid on Feb. 20 to shareholders of record on Feb. 11.

"You know I think a dividend hike of that size is one of the most bullish tells out there," he said. "I think you should go take a look at this one."

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