There's no better way to start the morning than a cup of joe, a glass of OJ, and a plateful of eggs and pancakes. While most commuters are finding their way to work, plenty of baby boomers have traded in their time at the office for social time at all-day breakfast restaurants like Denny's (Nasdaq:DENN), Bob Evans Farms (Nasdaq:BOBE) and International House of Pancakes, operated by DineEquity (NYSE:DIN), or a morning bite to-go at quick serve brands like McDonald's (NYSE:MCD).

Retail sales may be down, but even during an apparent recession, restaurants serving the first meal of the day could be a wise play on the shifting demographics within the U.S. (For related reading, check out Boomers: Twisting The Retirement Mindset.)

Big Money In Breakfast
Dining away from home is a great time saver and it is also a way for people to reconnect before a day full of activity. Breakfast as one of the best opportunities for foodservices to capture new growth due to individuals' increasingly busy schedules, according to the "2008 New American Diner Study" by Restaurants & Institutions.

The American Egg Board, the egg industries promotional arm, estimates that the breakfast market in the U.S. will grow into a $83 billion industry by 2015; it sat at $65 billion in 2007 according to market research firm Packaged Facts. Casual dinning establishments are taking notice and have taken the fight to the quick service set. Denny's, known for its all day breakfast, has new ads featuring its take-out boxes for the busiest customers who lack the time to sit and eat. McDonald's launched a new Chicken Biscuit sandwich earlier this year to compete with the popularity of Chick-fil-A's chicken breakfast sandwiches. Panera Bread (Nasdaq:PNRA) also began offering its own twist on breakfast sandwiches this year to capture its share of the growing market.

Investment Opportunities
McDonald's is the strongest choice among the group of breakfast providers mentioned here. In the casual dinning segment, DineEquity, parent company of IHOP, is a safer choice than Denny's which is trading below $3 per share. The unknown factor is the popularity of smaller local eateries. Each town has its own special mom-and-pop establishment with pictures on the walls of generations of dining patrons who they know on a first-name basis.

Parting Thoughts
The next time you're in a rush and you find yourself in line at your favorite breakfast eatery, take a moment to notice the makeup of its patrons. The combination of workers/retirees on the go and casual customers who have time to sit make following breakfast bodes well for investors interested in profiting from the growing popularity of the most important meal of the day.

Learn to put your money where your mouth is, in our related article Sinking Your Teeth Into Restaurant Stocks.

Related Articles
  1. Investing News

    Bank Stocks: Time to Buy or Avoid? (WFC, JPM, C)

    Bank stocks have been pounded. Is this the right time to buy or should they be avoided?
  2. Stock Analysis

    Why the Bullish Are Turning Bearish

    Banks are reducing their targets for the S&P 500 for 2016. Here's why.
  3. Stock Analysis

    How to Find Quality Stocks Amid the Wreckage

    Finding companies with good earnings and hitting on all cylinders in this environment, although possible, is not easy.
  4. Investing News

    What You Can Learn from Carl Icahn's Mistakes

    Carl Icahn has been a stellar performer in the investment world for decades, but following his lead these days could be dangerous.
  5. Stock Analysis

    Are U.S. Stocks Still the Place To Be in 2016?

    Understand why U.S. stocks are absolutely the place to be in 2016, even though the year has gotten off to an awful start for the market.
  6. Investing News

    U.S. Recession Without a Yield Curve Warning?

    The inverted yield curve has correctly predicted past recessions in the U.S. economy. However, that prediction model may fail in the current scenario.
  7. Investing

    Retirees: 7 Lessons from 2008 for the Next Crisis

    When the last big market crisis hit, many retirees ran to the sidelines. Next time, there are better ways to manage your portfolio.
  8. Economics

    Industries That Thrive On Recession

    Recessions are not equally hard on everyone. In fact, there are some industries that even flourish amid the adversity.
  9. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  10. Fundamental Analysis

    Is a U.S. Industrial Recession on the Horizon in 2016?

    Find out why the industrial economy may be teetering on an industrial recession and what could prevent it from going over the cliff.
  1. Which mutual funds made money in 2008?

    Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
  2. Do interest rates increase during a recession?

    Interest rates rarely increase during a recession. Actually, the opposite tends to happen; as the economy contracts, interest ... Read Full Answer >>
  3. What are the risks of annuities in a recession?

    Annuities come in several forms, the two most common being fixed annuities and variable annuities. During a recession, variable ... Read Full Answer >>
  4. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  5. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  6. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
Trading Center