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Exciting Restaurant Concepts Will Drive Chipotle Mexican Grill Forward

Chipotle Mexican Grill (NYSE: CMG  ) has long been considered the fastest-growing quick-service restaurant chain on the market. Chipotle has risen from $49 per share in 2009 to $517 per share at the time of writing. Because of its high-growth status, Chipotle's stock demands a high valuation--at $517 per share, Chipotle is valued at 40 times its forward earnings. Chipotle's valuation is higher than those of its peers Buffalo Wild Wings (NASDAQ: BWLD  ) and Yum! Brands (NYSE: YUM  ) , which have forward earnings valuations of 30.5 and 20.1, respectively.

Chipotle remains innovative
Chipotle Mexican Grill is famous for its burritos and tacos, and it operates more than 1,500 restaurants in the U.S., Canada, and several other international markets. But what makes investors really like Chipotle is its high growth rate. In the third quarter, Chipotle's sales rose 18% to $826.9 million with comparable-store sales growth of 6.2%. Its diluted EPS increased by 17.2% to $2.66 per share. 

Chipotle does not just rely on the existing restaurant concept to drive its future growth--it also innovates with other new and exciting concepts, especially ones that promote healthier eating habits for consumers. Recently, it introduced ShopHouse Southeast Asian Kitchen, which serves gluten-free and dairy-free Southeast Asian foods. With the same Chipotle restaurant format, ShopHouse serves different and healthy foods from Thailand, Singapore, Vietnam, and Malaysia. Tim Wildin, the concept development director of the company, commented that Chipotle was successful not because of its Mexican food, but because of its business model based on the "use of sustainable ingredients that take hours to prepare but seconds to serve." ShopHouse is considered one of the top long-term growth drivers for Chipotle.

Chipotle does not just stay in place, it keeps moving ahead with new ideas. It is also expanding into the pizza business with a pizza chain called Pizzeria Locale. Pizzeria Locale has around 10 classic pizzas, and customers can choose different ingredients in the interactive service line. Customers can also enjoy red or white Italian wine, which is available on tap. 

Yum! Brands and Buffalo Wild Wings are already in the pizza business
One of Chipotle's global peers, Yum! Brands, has pizza and tacos brands of its own, Pizza Hut and Taco Bell. Pizza Hut is available in more than 6,500 locations in 97 countries in the world. For its pizza business, Yum! Brands is enhancing its home delivery capabilities and high levels of asset utilization via Pizza Hut Wing Street in the U.S. In 2014, Pizza Hut's main focus will be pizza innovation, consistent everyday value, and the chicken sales layer.  Pizza Hut seems to be the most famous restaurant brand, as it was the most searched restaurant brand in 2013, according to Google Zeitgeist results. Buffalo Wild Wings ranked No. 8, while Chipotle stood at No. 10. 

Buffalo Wild Wings has also expanded into the pizza business. In March, Buffalo Wild Wings became a minority shareholder of PizzaRev, the innovative "Craft Your Own" fast casual pizza concept. It also became the first franchisee to operate a PizzaRev location. Buffalo Wild Wings considers PizzaRev an emerging brand that could fuel the company's future growth. In the first quarter of 2014, the company expects to open two of its own PizzaRev locations in the Minneapolis metro area, and several more by the end of fiscal 2014. 

My Foolish take
I personally think Pizzeria Locale has more advantages than PizzaRev as it could leverage the existing interactive service line business model of Chipotle. With its ShopHouse concept and its expansion into the pizza business, Chipotle will deliver much more growth in the future. Because of their high expected growth, both Chipotle and Buffalo Wild Wings are suitable for growth investors, while Yum! Brands will fit in the long-term portfolio of an income investor, as it offers a sweet 2.10% dividend yield.

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