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Quick summary: DNKN stock is no longer trading on the stock market; Dunkin’ Brands, the parent company of Dunkin’ Donuts, was taken private at the end of 2020 by private equity backed Inspire Brands. Inspire Brands is privately held, so there is no way to directly invest in the Dunkin’ chain at the current time.
Interested in investing in your favorite coffee shop? Curious how Dunkin’ Donuts and its parent company Dunkin’ Brands has performed as a stock? Read on to find out the details in our profile of the brief history of DNKN as a stock and why it’s not available today.
Dunkin’ Brands Group Inc: A Brief History
Dunkin’ Brands Group Inc. was a restaurant holding company that ran three national restaurant chains, including Dunkin’ Donuts, Mister Donut and Baskin Robbins. The Dunkin’ Brands name came into existence in 2004, a rebranding from its former name, Allied Domecq Quick Service Restaurants.
In 2005, Dunkin’ Brands was spun off from its parent company to a group of private equity firms, beginning a long history of the brand being bought and sold by private equity companies. After slimming down and selling some of its sub-brands, the company completed an initial public offering (IPO) in 2011, listing under the NASDAQ market.
In the late 2010s Dunkin’ Brands made a number of changes to its menu and brand, even dropping the name “donuts” from its most famous brand, Dunkin’ Donuts. It invested in coffee and experimented with plant-based menu offerings, in an attempt to appeal to the growing number of health-conscious consumers and better compete in the brutal Quick Service Restaurant (QSR) space.
In 2020, the company was hit by the pandemic and the stay at home trend. The company ultimately closed about 800 locations inside grocery and convenience stores, according to CNN Business. The fears over slowing growth may have been what led the company to pursue another private equity transaction, selling itself to Inspire Brands at the end of 2020.
DNKN Stock Performance 2011 – 2020
Like its competitor Krispy Kreme, the answer to “Is Dunkin’ Donuts publicly traded?” would depend on when you asked the question. As the company has now been in and out of various privately held holding companies and private equity firms, the company only was only publicly traded for a brief window of less than a decade, from 2011 – 2020.
Dunkin’ Brands traded under the ticker DNKN on the NASDAQ market. As this was a great decade for stocks in general, we would expect that DNKN performed well, perhaps up until the challenges of of 2020. So how did Dunkin’ investors make out?
The answer is: pretty great. DNKN shareholders achieved an annual rate of return of more than 17% (with dividends reinvested) according to Historical Stock Performance data. The stock started trading at $28 per share in 2011, and was bought out at a price of $106.48. That is an excellent investment performance on almost any metric for any type of company, let alone one that competes against the likes of Starbucks.
Dunkin’ Brands relative performance during its brief time as a public company was enviable, outperforming the broader market and most competitors in its sector, while not quite keeping pace with the likes of a resurgent Starbucks (few companies did). The performance was ultimately helped by the premium paid during the takeover, not to mention that the entire performance period took place during one of the most profitable bull markets in stock market history.
As a Dunkin’ executive said late in 2020, “Dunkin’ is thriving in a COVID world.” After the initial growth scare and a major dip in its share price, DNKN stock came storming back, to an even greater degree than the overall market, showing the durability of the brand and perhaps why Inspire Brands was willing to pay a hefty premium to fully own the company.
Inspire Brands Takeover
Inspire Brands acquired Dunkin’ for $106.25 per share at the end of 2020, in a deal worth $11.3 billion, according to CNN Business. You might be wondering after the phenomenal performance of DNKN stock if you can simply invest in Inspire Brands and continue the ride. Unfortunately not, as Inspire Brands is a privately held restaurant holding group backed by private equity firm Roark Capital Group. Inspire Brands counts Buffalo Wild Wings, Sonic, Jimmy John’s and 11,000 Arby’s restaurants as part of its portfolio.
Analysis of the deal was mostly positive for all sides. Dunkin’ Brands shareholders capped off an excellent run of performance by being taken out at a premium, while Inspire Brands added “complementary” brands and improved its national and international footprint.
Other Publicly Traded Coffee Stocks
While you unfortunately can’t currently invest in Dunkin’ Brands or its new parent group Inspire Brands, there are a number of other options in the QSR space that merit investigation. It’s important to remember that DNKN’s stock performance is not typical for the sector and most other competitors.
A case in point is our profile on Krispy Kreme (DNUT), which struggled to produce long-term positive returns in its first life as a public company in the early 2000s and now has returned to public equity markets, although with some analysts questioning its valuation.
Peet’s is another relative newcomer which had its IPO in late 2020 and was spun off from the same parent company as Krispy Kreme. Unfortunately for Robinhood Investors the stock is not currently available on the platform, as it trades on the Amsterdam market. However, Robinhood has been aggressive in adding OTC share classes of international stocks, so hopefully we will see JDEPF available on the app soon.
Starbucks (SBUX) is an iconic and blue chip company in the space that has performed exceptionally well for long-term investors and also has done an admirable job navigating the changing market and economic conditions of 2020. Much of its future success depends on continued international expansion, especially in markets such as China. Time will tell if this decade will be as successful for the company as the previous one has been.