Despite the resurgence of COVID-19 cases dampening the restaurant industry’s growth prospects, relatively inelastic demand for food and a robust online presence are expected to help the industry grow this year and beyond. So, it could be wise to add quality restaurant stocks such as Dine Brands (DIN), Chuy’s (CHUY), and RCI Hospitality (RICK) to your portfolio now.With the resurgence of COVID-19 cases limiting traditional dining, the restaurant industry witnessed a setback. The National Restaurant Association’s Restaurant Performance Index (RPI) dropped to a 6-month low in August at 104.2, down 1.1% from 105.4 in July.
However, as several restaurants are adopting advanced technologies and increasing digital offerings to adjust to the new normal, the industry should witness solid sales growth this year and beyond. According to the National Restaurant Association, food and beverage sales in the restaurant and foodservice industry are expected to be $789 billion in 2021, up 19.7% year-over-year.
So, it may be wise to bet on fundamentally strong restaurant stocks such as Dine Brands Global, Inc. (NYSE:DIN), Chuy's Holdings, Inc. (NASDAQ:CHUY), and RCI Hospitality Holdings, Inc. (RICK). They have a ‘Strong Buy’ rating in our POWR Ratings system along with an A or B grade for Quality.