Of Restaurant Stocks and Value Meals

It would have seemed that McDonald's and Burger King were no-brainer investments in the economic disaster that was 2009. With returns of minus 4.5% and minus 23%, respectively, those stocks tanked as others took off. McDonald's revenue has decreased about 7% this year, while Darden's sales have grown 2%. Customers trading down haven't been as much of a booster for McDonald's as initially expected. With so many sit-down options that are surprisingly cheap, the tradeoff to Ronald McDonald Land may not be worth it to some.

As the nation grows increasingly health-conscious, some Americans may not be able to cope with a Big Mac even though most entrees in sit-down alternatives like Chili's and Olive Garden are caloric nightmares that would give most wax-paper-wrapped fare a run for its money.

Compared with your local burrito joint, publicly traded restaurant businesses are more of a sure thing, yet that doesn't make all restaurants safe bets. Regardless of how many times the conventional wisdom is spouted that McDonald's is a good safety play, take a pause before entering the food industry through the golden arches.

Brinker and Darden are interesting alternatives, but temper your expectations. When it comes to food, Americans are fickle, and factors that no one can foresee can affect restaurant stocks.

-- Reported by David MacDougall in Boston.

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