27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.
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Analysts picked a winner in each category and then declared a champion.
1. Domestic Outlook
Currently, Starbucks has about 48 percent more stores nationwide than Dunkin does. As Dunkin continues its expansion in the West, analysts see a major domestic opportunity in California, where a recent Citi survey showed coffee drinkers have a favorable perception of Dunkin.
Winner: Dunkin' Donuts2. International Outlook
Although about 77 percent of Starbucks' revenue comes from the U.S., the company's international presence, which includes over 9,500 locations, makes it a global force.
Winner: Starbucks3. Digital Capabilities
Although Dunkin has recently increased its focus on loyalty, digital and mobile initiatives, this part of the competition simply comes down to numbers. There are currently more than 9 million My Starbucks Rewards members and only 2.5 million DD Perks members.
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4. Consumer Packaged Goods
Dunkin recently announced it will be launching K-Cups in U.S. grocery stores beginning May of this year. While Dunkin'has room to grow its packaged goods numbers domestically, analysts see a similar growth opportunity for Starbucks internationally, based on the company's global brand awareness.
Winner: It's a tie5. Store Economics
Analysts like Starbucks' average unit volume of $1.3 million, about 40 percent higher than Dunkin's. However, they also note that Dunkin's first-year, cash-on-cash returns for new locations have been greater than 25 percent, for an impressive four consecutive years.
Winner: It' a tie6. Valuation
Starbucks' stock has outperformed both Dunkin and the S&P 500 in the past year, and the stock currently sports an estimated 28.8 price to earnings ratio (P/E) based on 2016 projections.
Dunkin's stock currently trades at a projected 2016 P/E of only 25.5, lower than Starbucks and asset-light franchise peers Domino's Pizza, Inc. (NYSE: DPZ) (29.5 P/E) and Restaurant Brands International Inc (NYSE: QSR) (37.8 P/E).
Winner: Dunkin' DonutsA Champion Declared
Analysts acknowledge that both coffee companies put up a strong fight, adding, "Over the coming years, we think a number of factors, including an improving economic outlook, robust emerging market opportunities and continued growth in food away from home spending should benefit the coffee-specialty sector."
However, analysts give the slight edge to Starbucks overall because of its premium brand positioning and international growth opportunities.
Citi has a Buy rating on both Starbucks and Dunkin Brands.
Image Credit: Public Domain27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.