May 2023 Texas Roadhouse (TXRH) Stock and Woodford Reserve Whiskey Pairing

May 2023

Authors: James Hatfeild Allan Maule

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Website: texasroadhouse.com

Twitter: @texasroadhouse

CEO: Jerry Morgan

Founders: Kent Taylor

Market Cap at Time of Article: $7.42B

Current Analyst Recommendations (20 analysts’ price targets median): $110.44, so at its current price of $110.62, this is currently reasonably priced.

Revenue: $4.01B, so up 12.70% year-over-year. Which is good double-digit growth year-over-year for a restaurant stock.

Insider Ownership: 0.51%. Which is not much, and we would want to see that much higher.

What makes Texas Roadhouse (TXRH) worth your hard-earned money for the next decade or more?

Texas Roadhouse has a remarkable story and was started with a drawing on a cocktail napkin, and the first store opened in 1993. They now have 697 restaurants, some owned by franchisees, but 652 are owned by Texas Roadhouse company. They hold a few other restaurants, but the primary source of revenue is the 652-owned stores. The food focuses on freshly baked bread, hand-cut steaks, and ribs. This menu is timeless, and the focus of the restaurant product-wise is sound. Texas Roadhouse focuses its energy on customer experience, and the reviews and long lines affirm customers are happy. Texas Roadhouse is focused on growth and has plenty of runways to expand, which is exciting for buy-and-hold investors. We also love this addition for its 1.99% dividend that continues to grow year-over-year. TXRH is also raising menu prices to keep up with current inflation; we don’t see this hindering growth.

Why talk about Google to all your friends and family?

It’s best to talk about TXRH at Texas Roadhouse. The restaurant's quality and experience will leave you thinking, “Glad to be a shareholder.” We love to invest in things we know and love. Texas Roadhouse as a solid addition to any portfolio because it’s easy to explain and understand when recommending to friends. We won’t have many restaurants in our portfolio, but this one is well-run, financially responsible, and growing.

How is this company disruptive?

This company is disruptive because these restaurants have a long way to go to expand across the US and beyond. We love to see an opportunity to grow their footprint, financials, and dividends. Dividend growth stocks are fun in your portfolio because those quarterly dividends can be reinvested to expand your position if you take a quick look at the stock's long-term performance and only see the $7.4B market cap that also has to excite you.

Conclusion

We are huge fans of Texas Roadhouse and dollar cost averaging month over month while you build out your position. This is one of those stocks where you need to eat at the restaurant, see what the experience is like, and if you love it, invest confidently. We know they will continue to add more stores and expand their dividend.

Whiskey pairing: Woodford Reserve

Retail: $40. Proof: 94

Spring is here, and the weather is weird. The last month has given the Wealth and Whiskey team everything from torrential thunderstorms to sneezy pollen clouds to the sunny gleams we expect in Spring. In the same way, the market can’t seem to decide if we’re in a recession or simply a crisis of confidence. Lots of emotions, but not much clarity.

Such rapid changes might keep life interesting, but they can also overwhelm. In the spirit of beloved things that never, ever have to change, we decided to review a longtime favorite spirit of the Wealth and Whiskey team that’s delicious no matter how you drink it: Woodford Reserve straight bourbon.

Since 1996, Woodford’s flagship bourbon has offered easy-to-love taste in a well-rounded dram. No one will ever widen their eyes with admiration if you order Woodford Reserve, but they will give you a knowing nod of approval. There’s a reason this is the official bourbon of the Kentucky Derby. I don’t know anyone who likes bourbon who doesn’t appreciate this spirit—it’s the epitome of delicious consistency, which we can all use more of in these unpredictable days.

Nose:

There are many bourbons that favor vanilla notes in their nose, and Woodford is a prince among them. You’ll also detect hints of butterscotch, honey, and gently toasted oak.

Taste:

Honey and vanilla syrup mix with enough rye to spice things up. You might also notice hints of pepper and espresso, but the vanilla notes dominate.

Finish:

Caramel and cream linger on the palate, giving this bourbon its crowd-pleasing finish. Woodford doesn’t have the lasting punch that a truly exceptional bourbon would, but its more gentle approach also has its charms.

Overall: 4 of 5