Tuesday, July 13, 2010

CMG and DPS- Two Great Buys

Two of my favorite buys right now are Chipotle Mexican Grill (CMG) and Dr Pepper Snapple (DPS). Both of these companies are great growth stocks, and can continue consistent growth even if the economic recover is slower than expected.

First, lets talk about Chipotle. What's working for this company. First, it has wonderful brand recognition and is known for its great food at a reasonable price. Second, there are still many untapped markets for it to expand. Third, the ingredients are fresh and organic- a key difference from other fast food restaurants. Fourth, their Q1 numbers were great, and they raised FY guidance. I expect great numbers from them this quarter, and in the years to come.

Now, lets talk Dr Pepper Snapple. This company has flown under the radar the past year. They are currently sitting at a 52 week high- how many companies can say that. This isn't because they are a defensive play, its due to the tremendous growth of revenues/profits. The company is cutting costs and becoming very "lean". DPS is passing along its successes to its shareholders, increasing their dividend by 67% to $0.25/quarter. DPS would only raise their dividend this much if they knew that the company would continue to have great growth in revenues/profits in the years to come.

CMG 142.76 52wk 78.47-155.42
DPS 39.16 52wk 21.52-39.31

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