20 Mar

Analysts Expect Dunkin’ Brands’ EPS Growth to Fall in 2019

WRITTEN BY Rajiv Nanjapla

Analysts’ expectations

For 2019, Dunkin’ Brands’ (DNKN) management expects its adjusted EPS to be in the range of $2.94 to $2.99. For the same period, analysts are expecting the company to post adjusted EPS of $2.98, which represents growth of 2.7% from $2.90 in 2018. The expected EPS growth is a huge drop from the EPS growth of 19.3% in 2018.

Analysts Expect Dunkin’ Brands’ EPS Growth to Fall in 2019

Dunkin’ Brands’ revenue growth, expansion of EBIT (earnings before interest and tax) margin, and share repurchases are expected to drive Dunkin’ Brands’ EPS. Analysts expect Dunkin’ Brands’ EBIT margin to improve from 32.9% in 2018 to 33.7%. The expansion is expected to be driven by lower SG&A (selling, general, and administrative) expenses.

Analysts expect the company’s effective tax rate to be at 27.8% compared to 20.5% in 2018. The higher effective tax rate is expected to lower the company’s EPS in 2019. The company’s management expects its effective tax rate to be at 28% for 2019.

Peer comparison

For the same period, Starbucks (SBUX) and McDonald’s (MCD) are expected to post EPS growth of 12.1% and 2.9%, respectively.

Dividends

On February 7, Dunkin’ Brands announced quarterly dividends of $0.38 per share at an annualized payout of $1.50 per share. As of March 19, the company’s dividend yield stood at 2.1% with its stock price trading at $71.55. On the same day, the dividend yield of Starbucks and McDonald’s stood at 2.02% and 2.53, respectively.

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