Cara Operations Ltd (TSX:CARA) was up nearly 10% on Tuesday on news that it was acquiring The Keg for $200 million. Cara’s CEO, Bill Gregson, is a big fan of the restaurant chain, asking “Who wouldn’t want to be associated with The Keg?”
Cara is associated with many big restaurant brands in the country, including Swiss Chalet, Milestones, Harvey’s, and many others. When it comes to the restaurant industry, Cara’s portfolio of brands is unmatched, and could make it the ultimate food stock to invest in.
Cara has also seen tremendous growth over the years with sales of $463 million in 2016 rising more than 70% in just three years. The company looks to smash those totals yet again as in the past four quarters Cara’s sales have totaled $725 million. In its most recent quarter, sales were up 65% from a year ago.
Adding The Keg into the mix will only accelerate the company’s growth and likely push it to $1 billion in sales. Despite the strong results the company has achieved, its stock is up only 4% this year, and that is after the boost it got on Tuesday.
While investors may be drawn to Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR) with big-name brands like Tim Hortons and Burger King in the company’s portfolio, the diversification that Cara offers gives it more room to grow. Cara’s CEO has already alluded to big plans for The Keg beyond just Canada, stating that “We have 10 stores in the U.S. and we think there is also opportunity down in the States.”
