Chipotle Is Down 14% Compared to McDonald's 24%. But There's an Even Better Restaurant Stock to Buy in October.
2026-10-02 07:05
•Micah Zimmerman •The Motley Fool
•• ••• Axe Cap view
Why Texas Roadhouse Beats Chipotle and McDonald’s Right Now
Texas Roadhouse’s steady growth and dividend make it a more compelling restaurant stock than Chipotle or McDonald's this October.
Chipotle and McDonald's have both seen notable stock declines this year, down 14% and 24% respectively. While their brands are solid, they’re grappling with slower growth and no clear expansion to excite investors. Texas Roadhouse, on the other hand, is quietly building momentum. It’s delivered 6.2% comparable sales growth alongside steady weekly sales increases and is still opening new stores. Most strikingly, it rewards shareholders with a meaningful dividend and buybacks, showing management’s commitment to value creation. For South African investors, direct exposure to U.S. casual dining leaders is limited, but the theme here is risk appetite for income plus growth in a relatively stable consumer segment. Watch the rand (USD/ZAR), as a stronger dollar can lift returns on offshore portfolios. That said, consumer behaviour shifts or rising U.S. interest rates could undermine Texas Roadhouse’s expansion or dividend capacity. this is just our opinion and not financial advice
We would watch Texas Roadhouse for a selective buy, appreciating its dividend and growth mix. Avoid Chipotle and McDonald’s for now until they show clearer operational progress.
- TXRH
- USD/ZAR
- U.S. consumer spending slowdown
- Rising U.S. interest rates impacting dividend sustainability
6/10
While Chipotle and McDonald's stocks have declined significantly this year, Texas Roadhouse presents a more attractive investment opportunity. Despite a recent 15% monthly pullback, Texas Roadhouse's underlying business remains strong with growing comparable sales (6.2%), expanding store count, increasing average weekly sales, and a meaningful dividend. The company has become the largest casual-dining chain in the U.S. through operational excellence rather than heavy advertising, demonstrating strong customer loyalty and multiple ways to reward shareholders.
Our take is based on reporting first published by The Motley Fool.