Beyond Meat Has a New Partner, and They're Both Buys

Since its IPO in May, Beyond Meat Inc.'s (NASDAQ: BYND) stock has rocketed 384% higher. With its surging popularity, it's no surprise Beyond Meat has gained another partner.

And the deal is making both stocks worth owning right now.

Beyond Meat's insane growth is largely due to consumer curiosity in plant-based meat. But it's also because of its marketing tactics.

Beyond Meat doesn't tell people what to eat. Rather, it challenges their definition of meat.

And with Beyond Meat's success, companies all around the world want in. The plant-based meat market is already worth $12 billion. But over the next decade, MarketWatch says it'll soar to as high as $140 billion.

Beyond Meat has already secured partnerships with companies like Del Taco Restaurants Inc. (NASDAQ: TACO), Tim Hortons Inc., and 1933 Industries Inc.'s (CNSX: TGIF) TGI Fridays.

Now, Beyond Meat is adding another major fast-food player to it is partnership roster. And it's an excellent way to profit from the growing plant-based meat market.

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This firm has been around for 41 years. It's making plenty of cash, too. In 2019 alone, it's already made $52.3 million in net profits. Plus, it offers a solid 1.82% dividend yield.

And with its latest deal with Beyond Meat, its profits could rocket higher.

Check out why Beyond Meat's latest partner is a buy below.

Beyond Meat's Newest Partner Is a Staple American Chain

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Beyond Meat's latest partner to join in on the plant-based meat craze is Dunkin' Brands Inc. (NASDAQ: DNKN).

On June 24, Dunkin' announced its newest menu item following its 2018 push for a more streamlined and inclusive menu. And this menu item is its plant-based sausage breakfast sandwich - created through its partnership with Beyond Meat.

Plant-based meat retail sales have grown 10% in the last year alone. In fact, The Wall Street Journal says the average annual sales figure is $800 million. On top of that, even fast-food companies have seen a 10% increase in plant-based meat sales.

And now, Dunkin' is capitalizing on the newly booming alternative meat market.

Since the reveal on Wednesday, Dunkin's stock price has gone up over 3.2% to $82.65 per share. Now, 163 Dunkin' locations across Manhattan are serving Beyond Meat's meatless sausage for $4.29. And while no date was given for when it would be available across the rest of the United States, Dunkin' said it would be soon.

But what makes Dunkin' an even better buy now is the fact that it's the company behind brands like Baskin Robins and Dunkin' Donuts. And these are two of the biggest franchises in the United States. In fact, in 2019, Dunkin' added 392 stores worldwide (278 in the U.S.). Now, according to Statista, Dunkin' Brands has 9,419 stores in the United States and almost 13,000 total around the globe.

Since Dunkin' is a franchisor, it rakes in massive amounts of cash from franchise owners. For the roughly 13,000 stores worldwide, franchise owners have to pay Dunkin' for the use of its brand, training, marketing, and more.

Every week, Dunkin' Brands gets 5.9% of each franchise location's gross sales.

So, not only is Dunkin' building strong profits, but it also offers a big incentive from franchise owners to grow their sales. And it certainly helps that Dunkin' Brands' operating costs are low thanks to franchise owners paying the bill.

Dunkin's franchise strategy is how it made $1.3 billion in revenue for year-end 2018 - the 11th year in a row that Dunkin' has grown its sales. Plus, it's also netted returns of 225% since its 2011 IPO. And it certainly helps that company's financials are continuing their growth trend.

On top of its 11th year in a row of increased revenue growth, it also saw $230 million of that in net income for year-end 2018. And its sales are expected to grow another 3.4% to $1.42 billion by 2020.

But it isn't content with simply growing revenue. It has loftier goals for aggressive growth. In fact, in 2018, it completely revamped its menu to be simpler and faster for customers to use. Plus, it plans to expand to 14,000 stores by 2020. And eventually, the company wants to double the amount of U.S. franchise locations according to Dunkin's "blueprint for growth" released in early 2018.

Now that it's entered the plant-based meat market, it could see a 10% jump in sales thanks to Beyond Meat.

So, with its consistent growth, business model, and entrance into the plant-based meat market, Dunkin' is poised for long-term growth.

Right now, Dunkin' stock trades for $82.65. But with a target price of $95, you could gain as much as 15% on your investment within the year.

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About the Author

Daniel Smoot is a Baltimore-based editor who helps everyday investors with stock recommendations and analysis. He regularly writes about initial public offerings, technology, and more. He earned a Bachelor's degree from Towson University.

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