Top Restaurant Stocks to Buy for 2015

If you judged restaurant stocks simply by the performance of the biggest players, you'd likely consider 2014 a lost year for the industry. Fast food giantMcDonald's managed to once again finish among the Dogs of the Dowby sinking to the bottom third of the blue chip index in terms of annual return. Sit-down eatery Darden Restaurants didn't fare much better as declining customer traffic and an expensive Red Lobster sale hacked away at profits.

Still, a few big restaurant stocks leapt higher in the year. And the bright side of 2014's spotty performance is that it could set investors up for more enticing gains in the year ahead. With that in mind, here's a look at the valuations of some of the industry's largest players.

Source: Finviz.com

How much should you pay?What jumps out from this list is the huge range of prices that investors are willing to pay for restaurant stocks right now. At one end of the spectrum we have Chipotle, which is valued at an incredible five and a half times sales and 54 times earnings. Of course, a premium valuation has always been a part of the tex-mex chain's story of disrupting the fast food industry. And yet the stock still managed to double in 2013 -- and trounce the market again in 2014.

McDonald's sits at the other end of the valuation range, with investors paying just 19 times earnings for the stock -- a slight discount from the broader market. As it enters its third year of declining comparable store sales growth, investors aren't expecting much in terms of profit or revenue gains from Mickey D's. Still, that sluggish operational performance will be bolstered by huge capital returns to shareholders in the form of dividends and share repurchases.

Two promising candidatesAs 2015 buys, though, I find Panera and Buffalo Wild Wings the most attractive restaurant stocks to start the new year. Panera's shares are a decent value at less than two times sales. And while profit growth has stalled and comps are looking anemic (roughly 1% for the year), CEO Ron Shaich and his team have a good plan in the works to recover sales momentum. That all starts with priority No. 1: improving the guest experience by boosting throughput and order accuracy. The good news for investors is that Panera in the third quarter logged its highest growth in customer traffic since early 2012, which suggests that diners could start flocking back into cafes as the company makes those much-needed operational improvements.

Buffalo Wild Wings, on the other hand, is closing out a banner year during which almost everything went the company's way. Profit surged higher by 28% as chicken wing costs dove. And comps improved by over 6% in each of the first three quarters of the year. A recent menu price increase points to further growth on both metrics in the fourth quarter and beyond.

All of that success has made the stock more expensive, but not unreasonably so. In fact, shares are among the cheapest on our list by profit growth targets, with a PEG ratio below two.Wall Street expects B-Dubs to post an 18% earnings improvement in 2015 to $5 per share thanks to moderate chicken wing costs and additional market share gains. Meanwhile, the company is charging ahead with plans to open almost 100 new locations in the year. Management is aiming for a 1,700 restaurant base over time, and investors can expect many years of growth toward that number as the store count only just recently cracked 1,000.

The article Top Restaurant Stocks to Buy for 2015 originally appeared on Fool.com.

Demitrios Kalogeropoulos owns shares of Buffalo Wild Wings and McDonald's. The Motley Fool recommends Buffalo Wild Wings, Chipotle Mexican Grill, McDonald's, and Panera Bread. The Motley Fool owns shares of Buffalo Wild Wings, Chipotle Mexican Grill, and Panera Bread. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.