The restaurant industry is expected to rebound significantly this year, driven by pent-up demand. Consequently, mid-cap fast food stocks The Wendy’s Company (WEN), Papa John's (PZZA), and Jack in the Box (JACK), which possess robust growth potential, could be solid additions to one’s portfolio now. Read on.The COVID-19 pandemic had a severe impact on the global restaurant industry. In fact, the National Restaurant Association characterized 2020 as the “the most challenging year for the restaurant industry.” Nevertheless, companies adapted to the changing circumstances by building robust home delivery networks and drive-thrus. These adaptations allowed quick-service restaurants to generate a substantial increase in order volumes.
Dine-in restaurants have been making a strong comeback over the past couple of months owing to pent-up demand from patrons following nearly a year of take out orders, takeaways and home deliveries. The National Restaurant Association projects a 10.2% increase in total sales at U.S restaurants this year, with an 8% rise in sales at limited service fast food chains.
Given this backdrop, we think mid-cap restaurant operators The Wendy's Company (NASDAQ:WEN), Papa John's International, Inc. (NASDAQ:PZZA), and Jack in the Box Inc. (JACK) should grow substantially in the coming months. As such, shares of these companies could be solid additions to one’s portfolio now.