NEW YORK (TheStreet) -- Shares of Dunkin Brands Group (DNKN) are higher by 1.14% to $47 in pre-market trading Thursday, after the coffee and donut company announced its expanded partnership agreement with J.M. Smucker (SJM) and Keurig Green Mountain (GMCR) , Reuters reports.
The new deal, expected to take effect in the middle of this year, means Dunkin's K-Cup coffee packs will now be sold online and in stores throughout North America.
Previously the coffee company's K-Cups were only available in Dunkin' Donuts locations.
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Smucker has agreed to market Keurig-made K-Cups to grocery chains, mass merchandisers, club stores, drug stores, dollar stores and home improvement stores. Keurig agreed to market them to specialty stores and office supplies stores.
Dunkin' Brands also said the K-Cup packs will be sold online through various retailers starting this spring.
Also, Dunkin' Brands also said it agreed to a profit sharing deal with franchisees, giving them an equal shares of profit from the sale of K-Cup packs and packaged coffee.
Canton, MA-based Dunkin' Brands Group is a franchisor of quick service restaurants serving hot and cold coffee, baked goods, and ice cream.
The company franchises restaurants under its Dunkin' Donuts and Baskin-Robbins brands with more than 17,400 points of distribution in 55 countries.
Separately, TheStreet Ratings team rates DUNKIN' BRANDS GROUP INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate DUNKIN' BRANDS GROUP INC (DNKN) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 5.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- DUNKIN' BRANDS GROUP INC has improved earnings per share by 28.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DUNKIN' BRANDS GROUP INC increased its bottom line by earning $1.66 versus $1.36 in the prior year. This year, the market expects an improvement in earnings ($1.86 versus $1.66).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Hotels, Restaurants & Leisure industry average. The net income increased by 24.8% when compared to the same quarter one year prior, going from $42.07 million to $52.51 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, DUNKIN' BRANDS GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for DUNKIN' BRANDS GROUP INC is currently very high, coming in at 79.76%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.17% significantly outperformed against the industry average.
- You can view the full analysis from the report here: DNKN Ratings Report