DineEquity (NYSE:DIN) is focused on two well-known names among the eating-out masses: International House of Pancakes (IHOP) and Applebee’s.
DIN is run on the franchise model — presently, 99% of the 1,842 IHOP restaurants are franchised, as are 75% of Applebee’s 1,535 locations, though DIN is working toward a 100% figure in both by slowly selling off company-owned locations.
DIN takes in $1 billion in revenues and earned $73 million last year. A surprising 48% return on equity is the star number for DIN, as the company actually is fairly heavy in debt, with approximately $300 million of the $1.4 billion coming from financing operations used in the franchise model.
DIN does not provide a dividend, but a share repurchase program put in place by management last year should help future share appreciation, so mull over DineEquity while drenching your short stack in syrup.