Dine Brands Global, Inc. (NYSE: DIN)

Sector: Consumer Cyclical Industry: Restaurants CIK: 0000049754
Market Cap 486.31 Mn
P/B -2.10
P/E 14.71
P/S 0.56
ROIC (Qtr) 6.43
Div Yield % 6.19
Rev 1y % (Qtr) 10.84
Total Debt (Qtr) 1.63 Bn
Debt/Equity (Qtr) -7.02

About

Dine Brands Global, Inc., or DIN, operates in the restaurant industry, specifically in the casual dining segment. The company is renowned for its iconic brands, Applebee's and IHOP, which have been serving customers for many years. Dine Brands Global, Inc. is involved in various business activities, primarily generating revenue through the sale of food and beverages at its company-owned and franchise restaurants. The company's main products include the Applebee's and IHOP brand names, which are recognized globally for their signature menu items....

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 229.11M provide 3.28x coverage of short-term debt 69.96M, demonstrating strong liquidity position and minimal refinancing risk.
  • Tangible assets of 958.06M provide exceptional 28.28x coverage of deferred revenue 33.87M, showing strong service capability backing.
  • Robust free cash flow of 92.43M exceeds capital expenditure of 21.33M by 4.33x, indicating strong organic growth funding capability.
  • Operating cash flow of 113.77M provides strong 3.36x coverage of deferred revenue 33.87M, indicating service delivery capability.
  • Robust tangible asset base of 958.06M provides 52.06x coverage of working capital 18.40M, indicating strong operational backing.

Bear case

  • Operating cash flow of 113.77M barely covers its investment activities of (23.62M), with a coverage ratio of -4.82, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 113.77M provides thin coverage of dividend payments of (31.40M) with a -3.62 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 229.11M provide limited coverage of acquisition spending of (6.87M), which is -33.34x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 123.77M show weak coverage of depreciation charges of 41.48M, with a 2.98 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 92.43M represents just -8.69x of debt issuance (10.64M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Restaurants
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MCD Mcdonalds Corp 222.05 Bn 26.39 8.45 55.82 Bn
2 SBUX Starbucks Corp 95.51 Bn 51.45 2.57 26.61 Bn
3 CMG Chipotle Mexican Grill Inc 50.94 Bn 33.15 4.32 4.98 Bn
4 YUM Yum Brands Inc 43.17 Bn 29.83 5.36 11.55 Bn
5 QSR Restaurant Brands International Inc. 22.43 Bn 24.33 2.42 15.64 Bn
6 DRI Darden Restaurants Inc 21.91 Bn 19.91 1.77 6.16 Bn
7 YUMC Yum China Holdings, Inc. 18.12 Bn 20.05 1.57 1.84 Bn
8 DPZ Dominos Pizza Inc 14.57 Bn 24.72 3.01 5.05 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.06 2.05
EV to Cash from Ops. EV/CFO 16.57 16.57
EV to Debt EV to Debt 1.16 4.75
EV to EBIT EV/EBIT 15.23 3.45
EV to EBITDA EV/EBITDA 11.35 9.76
EV to Free Cash Flow [EV/FCF] EV/FCF 20.40 29.06
EV to Market Cap EV to Market Cap 3.88 6.55
EV to Revenue EV/Rev 2.18 2.40
Price to Book Value [P/B] P/B -2.10 -1.40
Price to Earnings [P/E] P/E 14.71 13.35
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.01 -9.56
Dividend Payout Ratio % Div Payout % (Qtr) 91.10 18.72
Dividend per Basic Share Div per Share (Qtr) 2.04 0.84
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 31.80 30.41
Interest Coverage Int. cover (Qtr) 1.67 -86.85
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -40.41 -24.56
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 6.26 35.50
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 -0.72
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -44.56 -564.81
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -24.20 25.78
EBIT Growth (1y) % EBIT 1y % (Qtr) -31.50 -507.68
EBT Growth (1y) % EBT 1y % (Qtr) -54.03 -41.98
EPS Growth (1y) % EPS 1y % (Qtr) -62.67 -126.51
FCF Growth (1y) % FCF 1y % (Qtr) -19.15 5,724.78
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -9.28 23.70
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.49 0.99
Cash Payout Ratio Cash Payout (Qtr) 0.23 0.07
Cash Ratio Cash Ratio (Qtr) 0.67 0.78
Current Ratio Curr Ratio (Qtr) 1.05 1.47
Debt to Equity Ratio Debt/Equity (Qtr) -7.02 0.05
Interest Cover Ratio Int Coverage (Qtr) 1.67 -86.85
Times Interest Earned Times Interest Earned (Qtr) 1.67 -86.85
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 19.10 7.71
EBIT Margin % EBIT Margin % (Qtr) 14.28 -2.27
EBT Margin % EBT Margin % (Qtr) 5.72 -1.97
Gross Margin % Gross Margin % (Qtr) 40.70 34.04
Net Profit Margin % Net Margin % (Qtr) 3.80 -3.69