Talking Numbers

Why Dunkin' Donuts is eating McDonald's breakfast

Why Dunkin' Donuts is eating McDonald's breakfast
VIDEO3:3603:36
Why Dunkin' Donuts is eating McDonald's breakfast

America may or may not run on Dunkin' but Dunkin' Brands runs up on earnings.

The purveyor of absurdly delicious donuts and fairly decent coffee reported fourth-quarter earnings of $0.43 per share ($0.39 if you factor in one-time charges and the like). Wall Street had been expecting $0.40 in earnings. As well, the company's top line was better than analysts expected; $183.2 million compared to the consensus estimate of $178 million.

Besides saying the Dukin' Brands expects revenues to grow between 6% and 8% in 2014, it also boosted its quarterly dividend from $0.19 to $0.23 per share. The parent company of Dunkin' Donuts and Baskin-Robbins is expecting healthy sales growth even if their 490 calorie apple crumb donut may not be so healthy if consumed several times a day.

(Read: )

Though about one-third of Dunkin' Donuts 10,800 stores are located outside the United States, the vast majority of its American locations are in the eastern half of the country. According to Gina Sanchez, founder of Chantico Global, that gives the company more room to expand.

"I think that there is incredible growth potential," says Sanchez, who notes that Dunkin's same-store sales the fourth-quarter were positive while rival McDonald's showed same-store sale losses. "If you look at their expansion plans, they have over 7,300 stores across the nation. Only 191 of those stores are in the West. They're planning 5,000 new store openings in the West, a thousand of which will be in California. That's incredible opportunity."

Jeff Tomasulo, Managing Partner of Belpointe Alternative Investments, says Thursday's pop in the stock above $50 per share after the earnings announcement meant a break above a key technical level.

(Watch: Dunkin' CEO: Consumers excited about innovation)

"It's actually looking really good," says Tomasulo about Dunkin' Brands' stock. "For the last two-years, it really hasn't broken below that 20-week moving average. Then, for the last two months, we sat in a trading range between $46 and $49."

Tomasulo believes investors should keep an eye on whether the stock can stay above the trading range of $46 to $49 and remain above its 20-week moving average, currently near $47.

"Those are some really good points to use," says Tomasulo.

To see the rest of the discussion on Dunkin' Brands with Sanchez on the fundamentals and Tomasulo on the technicals, watch the video above.

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