Could This Be the Last Call to Own DIN Stock?
Usually, at Income Investors, we don’t look at companies that have a dividend yield of less than 8% to 10%. And Dine Brands Global Inc (NYSE:DIN) could be moving out of our desired range soon.
DIN stock was first profiled here back in early March 2025. At that time, the stock price performance was anemic. A few weeks later, DIN stock dropped more in the midst of the broad market sell-off. It looked like the floor just fell out from under it.
But now DIN stock is back to where it was in March, and it could be setting up to soar. So, investors who have never looked at this company before, who didn’t pay attention to it during the stock market sell-off in April, should know that the doors of opportunity could be closing soon.
What Does Dine Brands Global Do?
Dine Brands Global owns, franchises, and operates restaurants in the U.S. and internationally. It is very likely you have heard about, dined at, or passed by one of its restaurants if you live in the U.S.
The company operates through six segments: Applebee’s Franchise Operations; International House of Pancakes (IHOP) Franchise Solutions; Fuzzy’s Franchise Operations; Rental Operations; Financing Operations; and Company-Operated Restaurant Operations.
Dine Brands owns and franchises three restaurant concepts/brands:
- Applebee’s Neighborhood Grill + Bar offers casual dining
- IHOP, known for its breakfast menu, also offers lunch and dinner options
- Fuzzy’s Taco Shop offers Baja-style Mexican food
Solid Financial Performance Means Rising Stock
Dine Brands’ financial performance hasn’t been good over the past few quarters, but there’s some light at the end of the tunnel, to say the least. And keep in mind that the stock market is a forward-looking animal; essentially, what’s ahead matters much more than what has already happened.
On May 7, Dine Brands Global reported its financial results for the first quarter of 2025, ended March 31. At that time, John Peyton, the company’s chief executive officer, had this to say regarding business conditions:
“As we navigate the current operating environment, the fundamentals of our business remain strong, and since the second half of the quarter, we’re seeing steady improvement across sales, traffic, and our development pipeline.” (Source: “Dine Brands Global, Inc. Reports First Quarter 2025 Results,” Dine Brands Global Inc, May 7, 2025.)
Now let’s dig a little more into the financial performance…
Dine Brands’ total revenues for the first quarter of 2025 were $214.8 million, up from $206.2 million in the same quarter of 2024.
The company’s adjusted net income was $15.4 million, with adjusted earnings per diluted share of $1.03, in the first quarter of 2025. This is down slightly from adjusted net income of $19.9 million, or adjusted earnings per diluted share of $1.33, a year ago.
How are 2025 and 2026 looking for Dine Brands Global?
The Wall Street analysts are predicting revenue growth in 2025 and 2026, and for profitability to improve significantly. (Source: “Analysis,” Yahoo! Finance, last accessed May 14, 2025.)
All in all, if the company’s financials improve, DIN stock won’t remain low for long.
Dine Brands Bullish on DIN Stock?
Another thing investors shouldn’t forget is that the management of the company is aggressively buying back DIN stock.
In 2023 alone, Dine Brands spent $26.0 million to buy back its own shares.
In 2024, it spent $12.0 million on share buybacks,
In the first quarter of 2025, the company shelled out $1.6 million to buy DIN stock.
Let that sink in.
This isn’t a “hope and pray” move. Usually when a company is buying large chunks of its own stock, it’s a sign that management thinks the stock price is undervalued. Plus, buybacks of this size can have a significant impact. Fewer shares mean higher earnings per share, greater flexibility with dividend hikes, and increased pressure on short sellers.
Chart Courtesy of StockCharts.com
Income Investors Get a Robust Dividend
The dividend with DIN stock is excellent.
On a quarterly basis, Dine Brands has been paying $0.51 per share. This equates to $2.04 per share on an annual basis for a dividend yield of close to 8.3%.
Now, are the dividends safe here?
In simple terms, yes.
You see, Dine Brands has a franchise model in place, which means it has decent cash flow. And that’s where the dividends come from. In addition to this, the payout ratio with DIN stock is less than 60%. This is low, indicating that the dividends aren’t in trouble.
The Lowdown on DIN Stock
Dine Brands is a stock that income investors shouldn’t overlook. DIN stock has struggled a lot, but there could be a decent recovery ahead, as there’s some light at the end of tunnel when it comes to the company’s financial performance.
While DIN stock recovers, the dividend attached to it is robust. It’s not common to see a restaurant operator dishing out an inflation-crushing dividend of over eight percent.
On top everything, DIN stock has high institutional ownership. As per the most recent data, over 87% of all outstanding shares were owned by institutional investors.
Why pay attention to institutional investors?
They provide support for the stock, as they tend to remain invested for the long term rather than day-trading the stock.