share price update

54.29

-0.14 (-0.26%)

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I would not mind at all working for this company. They have good values and seem to care a lot about their employees and community.

I would like to invest in this company. They have managed steady growth.
As of today, it finished at: 53.60. September 1, it was trading at: 34.20. I would have bought 29 shares with 1,000 dollars. I would have an extra $562.60 if I would have invested on September 1.


As far as being customer, I cannot never visit IHOP enough.

Most Interesting Thing I learned About My Company

The most interesting things I learned about my company was that it was owned by DinEquity, which also owns Applebee's. I also learned that:

• More than 99 percent of IHOP restaurants are operated by franchisees, who are independent business people.
• As of September 30, 2010, there were 1,483 IHOP restaurants located in 50 states and the District of Columbia, Canada, Mexico, Puerto Rico and the U.S. Virgin Islands.
• National Pancake Day is IHOP's largest one-day event and to date has raised more than $5.35 million in support of Children's Miracle Network and other local charities

How Cheap Is DineEquity's Stock by the Numbers?

How Cheap Is DineEquity's Stock by the Numbers?

by Anand Chokkavelu - November 26, 2010 - 0 comments           

 Numbers can lie -- yet they're the best first step in determining whether a stock is a buy. In this series, we use some carefully chosen metrics to size up a stock's true value based on the following clues:

• The current price multiples.
• The consistency of past earnings and cash flow.
• The amount of growth we can expect.

 Let's see what those numbers can tell us about how expensive or cheap DineEquity (NYSE:DIN) might be.

The current price multiplesFirst, we'll look at most investors' favorite metric: the price-to-earnings ratio. It divides the company's share price by its earnings per share (EPS). The lower the P/E, the better.

Then we'll take things up a notch with a more advanced metric: enterprise value to unlevered free cash flow. This tool divides the company's enterprise value (basically, its market cap plus its debt, minus its cash) by its unlevered free cash flow (its free cash flow, adding back the interest payments on its debt). As with the P/E, the lower this number is, the better.

Analysts argue about which is more important -- earnings or cash flow. Who cares? A good buy ideally has low multiples on both.

DineEquity has a P/E ratio of 232.1 and an EV/FCF ratio of 12.0 over the trailing 12 months. If we stretch and compare current valuations with the five-year averages for earnings and free cash flow, we see that DineEquity has a negative P/E ratio and a five-year EV/FCF ratio of 17.4.

A one-year ratio of less than 10 for both metrics is ideal. For a five-year metric, less than 20 is ideal.

DineEquity has a mixed performance in hitting the ideal targets, but let's see how it stacks up against some of its competitors and industry mates. 

Company	1-Year P/E	1-Year EV/FCF	5-Year P/E	5-Year EV/FCF
DineEquity	232.1	12.0	NM	17.4
Cheesecake Factory (Nasdaq: CAKE)	31.2	14.4	28.0	33.9
Brinker International (NYSE: EAT)	12.4	9.7	12.7	13.5
Cracker Barrel Old Country Store(Nasdaq: CBRL)	15.5	11.1	13.3	18.6

Source: Capital IQ, a division of Standard & Poor's; NM = not meaningful.

Numerically, we've seen how DineEquity's valuation rates on both an absolute and relative basis. Next, let's examine …

The consistency of past earnings and cash flowAn ideal company will be consistently strong in its earnings and cash-flow generation.

In the past five years, DineEquity's net income margin has ranged from -4.4% to 12.6%. In that same time frame, unlevered free cash flow margin has ranged from 14.0% to 22.4%.

How do those figures compare with those of the company's peers? See for yourself:

 In addition, over the past five years, DineEquity has tallied up three years of positive earnings and five years of positive free cash flow.

Next, let's figure out …

How much growth we can expectAnalysts tend to comically overstate their five-year growth estimates. If you accept them at face value, you will overpay for stocks. But even though you should definitely take the analysts' prognostications with a grain of salt, they can still provide a useful starting point when compared with similar numbers from a company's closest rivals.

Let's start by seeing what this company's done over the past five years. Because of prior losses, DineEquity's EPS growth rate isn't meaningful. Meanwhile, Wall Street's analysts expect future growth rates of 14.0%.

Here's how DineEquity compares with its peers for trailing five-year growth:

 And here's how it measures up with regard to the growth analysts expect over the next five years:

 The bottom line

The pile of numbers we've plowed through has shown us how cheap shares of DineEquity are trading, how consistent its performance has been, and what kind of growth profile it has -- both on an absolute and a relative basis.

The more consistent a company's performance has been and the more growth we can expect, the more we should be willing to pay. We've gone well beyond looking at a 232.1 P/E ratio.

I find the three comp companies more enticing than DineEquity and its Applebee's and International House of Pancakes brands. But that's just me.

If you find DineEquity's numbers compelling, don't stop here. Continue your due-diligence process until you're confident that the initial numbers aren't lying to you.

share price update

54.41

+0.46 (0.85%)

Nov 26 - Close

share price update

50.78

+0.70 (1.40%)

Real-time:   2:39PM EST

Chapter 12

The part of Chapter 12 that most pertains to my company is "Grounding the Culture in Core Values and Ethics." This is an excerpt from DinEquity's website, under Responsibilty:

"We operate under a cultural framework that we call our Vision and Values. Our Vision and Values are the foundation of our relationships with our guests, suppliers, neighborhoods and each other. It is an articulation of our values and behaviors that defines who we are and how we work. We value innovation, collaboration and diversity and we behave with integrity. These core values and beliefs are also how we hold ourselves and each other accountable to the vision of what we want DineEquity to be."