3 Restaurant Stock Picks For 2016

The restaurant industry is one that usually garners a great deal of attention from investors, as consumer preferences and eating habits seem to be ever-changing, and so too do the restaurant stock winners and losers. The restaurant category is also considered one of the better industries in the market by Zacks, ranking in the top 29% of all industries. As the New Year quickly approaches and investors look to re-asses their portfolios, let’s take a look at 3 current strong-buy-ranked restaurant stock pick ideas for 2016.

1. McDonald’s Corp. (MCD – Analyst Report)

If you haven’t already noticed, it seems as though McDonald’s is currently turning itself around and getting back on the right track to success. Though the past couple years have been tough, the iconic American burger chain has been performing quite well in the last few months of 2015, and the company is poised to roll into 2016 and keep its positive momentum.

McDonalds is currently a Zacks Rank #1 (Strong Buy), and for good reason. In its most recent earnings report, the corporation was able to beat the Zacks EPS Consensus by 10%, posting an EPS of $1.40, compared to the estimate of $1.27. Many investors and analysts of McDonald’s have been concerned about the company’s same-store-sales growth, as it hasn’t been positive recently, but in Q3, the company was able to post growth of 4% globally. Also, for the first time in two years, McDonald’s saw positive same-store-sales growth in the U.S., posting growth of 0.9%.

Analysts seem to think 2016 will be a year in which McDonalds could see a great deal of success, as there have been 16 estimate revisions upward for the year in the past 60 days, pushing the Zacks Consensus EPS Estimate up to $5.35, from $5.13. With projected EPS growth of 9.3% for the year and an appetizing dividend of 3.1%, investors should surely be looking into McDonald’s as a portfolio addition for the upcoming year.