You might not think that a mom-and-pop-style restaurant selling tchotchkes and knickknacks would be the type of company to make much of a splash on Wall Street. But lately, Cracker Barrel (CBRL -0.03%) appears to be doing exactly that.

The restaurant chain's stock has reached an all-time high this year, and the company has given back to shareholders with recent dividends and buybacks. Is this a one-time shot of success, or could it be the sign of a reliable long-term pick for a portfolio?

Homegrown earnings
For years, Cracker Barrel has operated on a simple concept: Offer food to local customers and the weary interstate traveler. Even in an ever more tech-centric society, the company hasn't needed to update this business model very much. Sure, Cracker Barrel has hopped on the mobile bandwagon and created a free mobile app for finding its restaurants, but the company's advertising is still mostly dependent on billboards, not mobile phones. Seeing as 84% of its restaurants are along interstate highways, this kind of promotion makes sense.

It seems like that down-to-earth logic is paying off. Over the past five years, the restaurant has seen revenue steadily increase from $2.3 billion to $2.6 billion .  During the recession, between 2008 and 2009, the company took just a slight 0.7% hit in earnings, dropping from $2.38 billion to $2.36 billion, before picking up where it left off and bringing in $2.4 billion the next year. In 2013, Cracker Barrel opened eight new stores, and its average comparable-store weekly sales went up from $4,236 per store to $4,280. Even when times were tough, this company has kept chugging along.

Cracker Barrel also knows how to keep some of the money it makes. The company's operating margin has grown from 6.8% to 7.8% since 2011. These numbers might look small, but given the volatility of prices for commodities like beef and chicken, restaurants tend to see high production costs and smaller margins.  For Cracker Barrel to have margins increasing in lockstep with revenue is a promising sign. 

Payouts, buybacks, special dividends, oh my!
To thank investors for their continued support (and perhaps attract new ones), Cracker Barrel has progressively upped its quarterly dividends, most recently boosting its payout from $0.50 a share to $0.75 in July (which created a nice 2.8% yield). Not only is Cracker Barrel giving back with a dividend, it's also planning to make investors' shares go up in value, having recently received authorization for a $50 million share repurchase program.

Still, Cracker Barrel's biggest shareholder, Sardar Biglari (chairman and CEO of Biglari Holdings) is pushing for the company to give even more back -- namely, a $20 special dividend. In a filing with the SEC, Biglari said he and his associates "have called upon the Board to pay a special dividend" for months now, but that "the Board has resisted our overtures," even after bringing in more revenue and "reducing its net debt position by over $2 per share." If it sounds like he's fighting for the good of the shareholders here, remember that Biglari Holdings owns nearly 20% of shares, so the bulk of that payout would be going directly toward the company's squeakiest wheel.

It's not the first time Biglari has tried to make himself heard -- he's tried to become a board member in the past and was denied twice , and as fellow Fool contributor Michael Lewis detailed, Cracker Barrel management even offered him a "go-away" share buyout, which also got denied.

Take a look at the math, and it's easy to see why Cracker Barrel is pushing against this kind of special dividend. The company has approximately 23.8 million shares outstanding, and multiplying that amount by $20 comes up to $476 million- that's 3.91 times more than the $121.7 million of cash that Cracker Barrel had on the books in 2013. Instead of spending more cash than it has in one dramatic gesture, the company is choosing to give back in a more rational way, cementing investor loyalty as its business continues to grow.

Served with a side of debt
Indebtedness is another reason Cracker Barrel should shy away from a $20 special dividend. The restaurant chain has held between $520 million and $640 million of long-term debt for several years.

However, in 2013, Cracker Barrel dipped into its cash reserves, as well as the money it received from leasing back 15 stores (meaning it can still use those locations, it just doesn't own them) to pay back $142.7 million worth of debt. That action brought its total long-term debt down to $400 million, the lowest Cracker Barrel has seen since 2005 . Paying down debt is good, but there's still a lot left, and with a long-term record of this kind of burden on the books, it doesn't seem likely that Cracker Barrel will be completely resolving its indebtedness in one fell swoop anytime soon.

Check, please?
Cracker Barrel has weathered the storms that have befallen its industry over the past few years by continuing along in its no-drama, no-nonsense way of doing business. As a result, revenues are up, margins are solid, and shareholders are reaping the benefits.

However, before joyfully jumping on board with this stock, one must take into account its debt situation. Cracker Barrel has carried a significant burden since at least 2005, and even though the company chipped away at a fair portion of it during 2013, a sizable block still remains. For that reason, long-term investors may want to proceed with caution.