Dunkin' Brands (NASDAQ:DNKN), the parent company of Dunkin' Donuts and Baskin-Robbins, is home to one of the best performing stocks in the quick-serve restaurant industry over the last few years and its earnings have played a key role in its rise. It has scheduled its first-quarter results for release in just a few days and this report could help propel its shares even higher. Let's take a look at the company's most recent quarterly report, the expectations for the upcoming release, and take a look at its top competitor, Starbucks (NASDAQ:SBUX), to decide if we should buy or avoid the stock right now.

Source: Dunkin' Brands

The last time out
On Feb. 6, Dunkin' released fourth-quarter results to finish off a record-setting fiscal 2013; here's a breakdown and a year-over-year comparison of the results:

Earnings Per Share $0.43 $0.43
Revenue $183.20 million $183.13 million

Source: Benzinga

The company's earnings per share increased 26.5% and revenue increased 13.3% year-over-year, driven by an impressive 3.5% increase in comparable-store sales at Dunkin' Donuts locations in the United States. Operating income rose 11.8% to $89.2 million and the operating margin showed strength, expanding 110 basis points to 48.7%. Also, 309 new restaurants opened up throughout the world during the quarter, with 149 of these being Dunkin' Donuts locations in the U.S.

Source: Dunkin' Donuts' Twitter

The strong fourth-quarter and full-year financials for fiscal 2013 allowed Dunkin's management to make two very shareholder-friendly announcements in the report, a dividend increase and a share repurchase authorization. First off, the company increased its quarterly dividend 21.1% to $0.23, and this gives its stock a yield of roughly 1.9% at current levels.

Secondly, the Board of Directors authorized a $125 million share repurchase program which is effective immediately; share repurchases reduce the amount of shares outstanding, which increases earnings per share and makes the remaining shares on the market more valuable. These are two of the most bullish moves a management team can make which proves that they are truly dedicated to maximizing shareholder value.

Overall, it was a great quarter for Dunkin' and its stock reacted by moving over 3% higher in the next trading session. Its shares continued to rally over the next several weeks, but they have fallen with the overall market since late March and this has taken away almost all of their gains.

Expectations & what to watch for
Dunkin's first-quarter results are due out before the market opens on April 24 and the current estimates call for growth on both the top and bottom lines; here's an overview:

MetricExpectedYear Ago
Earnings Per Share $0.36 $0.29
Revenue $172.94 million $161.90 million

Source: Estimize

These expectations call for Dunkin's earnings per share to increase 24.1% and revenue to increase 6.8% from the year-ago period; these metrics seem quite attainable, but there will also be three other statistics and updates to watch closely for in the report:

Source: Dunkin' Donuts' Twitter

  1. It will be very important for Dunkin' to provide guidance for the second quarter that is within analysts' expectations; currently, the consensus analyst estimates call for earnings per share of $0.47 and revenue of $196.92 million, which represent year-over-year increases of 14.6% and 7.9% respectively. 
  2. While providing guidance for the second quarter that satisfies Wall Street, it will also be important for Dunkin' to maintain (or raise) the full-year earnings and revenue expectations that it gave in its fourth-quarter report; these expectations projected earnings per share in the range of $1.79-$1.83 and revenue growth of 6%-8% from fiscal 2013.
  3. Watch for the number of new restaurants opened during the quarter and make sure the company is on pace to meet its expansion goals for the year. Expansion is a crucial growth factor for a company that is nearly 100% franchised like Dunkin' is; in the fourth-quarter report, the company said that it expects to open 380-410 Dunkin' Donuts locations in the U.S. and 300-400 new international locations between both of its brands.
If Dunkin' Brands can meet or exceed analysts' estimates and satisfy these three factors in the process, and I think that it will, I believe the stock will immediately start its journey back toward its 52-week high; it currently sits more than 9% below this high, which makes for an intriguing investment opportunity that I think Foolish investors should take advantage of right now.

Competitor's results due out on the same day
On the day of Dunkin's first-quarter report, Starbucks, its largest competitor, will release its second-quarter results; however, Starbucks' report is due out after the market closes, so Dunkin's report in the morning may be a sign of things to come. Here's what analysts currently expect to see:

MetricExpectedYear Ago
Earnings Per Share $0.56 $0.48
Revenue $3.97 billion $3.56 billion

Source: Estimize

Source: Starbucks

These estimates call for Starbucks' earnings per share to increase 16.7% and revenue to increase 11.5% year-over-year. If these expectations become reality, this would also result in yet another record-setting quarter for the company and put it on pace for a record-setting year, just as with Dunkin' Brands. It appears that the coffee and quick-serve restaurant industry is treating these two giants well. 

In terms of performance, Starbucks' stock has been beaten down right alongside that of Dunkin over the last several weeks and it now sits more than 15% below its 52-week high. I believe Starbucks represents just as great of an investment opportunity as Dunkin' does right now, so investors could simply take their pick of these and do little wrong for their portfolios; with this said, if you are a Starbucks investor, watch Dunkin's report in the morning closely and use the information provided to your advantage going into Starbucks' after-hours release.

The Foolish bottom line
Dunkin' Brands has watched its stock fall over the last several weeks, but I believe this is nothing more than a buying opportunity. The company is set to release its quarterly results in a couple of days and I think the company will satisfy analysts' expectations with ease, which will propel its shares toward their previous highs. Foolish investors should strongly consider initiating positions in this worldwide restaurant titan right now and holding onto them for many years.