NEW YORK (TheStreet) -- Dunkin Brands Group (DNKN) - Get Report stock is up by 1.12% to $42.43 in mid-morning trading on Tuesday, after its subsidiary Dunkin' Donuts singed a multi-year marketing partnership with the Madison Square Garden Co. (MSG).
The agreement will make Dunkin' Donuts' products the official coffee, baked goods and breakfast sandwich of the Madison Square Garden arena, the New York Knicks and the New York Liberty basketball teams, and the New York Rangers hockey team.
The Madison Square Garden arena hosts nearly 200 regular season basketball and hockey games a year and can seat up to 19,830 people.
Dunkin' Donuts will promote its brand during sporting events and continue to operate its two locations within the arena.
"This landmark deal is a watershed moment for the brand as we continue to expand our presence in the sports world," Tom Manchester, vice president of field marketing for Dunkin' Brands, said in a statement.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate DUNKIN' BRANDS GROUP INC as a Hold with a ratings score of C+. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- DNKN's revenue growth has slightly outpaced the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 8.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for DUNKIN' BRANDS GROUP INC is currently very high, coming in at 80.38%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.02% is above that of the industry average.
- After a year of stock price fluctuations, the net result is that DNKN's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Hotels, Restaurants & Leisure industry average, but is greater than that of the S&P 500. The net income has decreased by 15.5% when compared to the same quarter one year ago, dropping from $54.70 million to $46.22 million.
- Net operating cash flow has decreased to $35.56 million or 36.70% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: DNKN