Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, coffee shop operator Dunkin' Brands Group (Nasdaq: DNKN) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Dunkin's business and see what CAPS investors are saying about the stock right now.


Headquarters (founded) Canton, Mass. (2004)
Market Cap $3.6 billion
Industry Restaurants
Trailing-12-Month Revenue $656.8 million
Management CEO Nigel Travis (since January 2009)
CFO Paul Carbone (since June 2012)
Trailing-12-Month Return on Equity 11.6%
Cash/Debt $218.7 million / $1.5 billion
Dividend Yield 2.0%
Competitors McDonald's
Yum! Brands

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 40% of the 247 members who have rated Dunkin' believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those bears, TMFHarleyQuinn, showed skepticism over management's business strategy:

Though the company has great expansion plans and many exciting news announcements, there is an underlying and fundamental issue with its structure as an "Asset - Light" business . The company has almost $2B in debt, backed by an overinflated valuation of its Trade Name. Though this is a company that makes its money through franchise and licensing agreements, hence lending to the idea of an asset-light strategy, backing up a substantial amount of debt with an Intangible Asset (Trade Names, etc.) is a very risky move. I will be curious to see what happens in the next 2-3 years with all of the expansions, but I think that in the end the company will have to come up with a new strategy, which could create investor-averse conditions.

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