Americans are dining out again. The U.S. Department of Commerce reported recently that while core retail sales were flat for September, for the first nine months of 2015, total spending on food and drink services was up a hefty 8.5% from the 2014 total.

You may have already found a trip to your favorite restaurant, bar, or football Sunday hangout a bit more cramped than last year. Perhaps you have pondered how to invest to take advantage of this. To figure that out, you'll want to investigate who is currently winning the food and drink industry's battle for your discretionary spending budget and then look at what might be good stocks for your money.

Sales growth, profit margins, and future expectations
Some basic metrics for measuring any retail business, including restaurants, are sales growth and the margins on those sales. Following is a list of companies that have been posting some of the best combinations of sales growth and margins over the trailing-12-month period, along with their corresponding market cap as of earlier in October. I've filtered out any company that has less than 10% sales growth or net profit margin, or any negative sales growth or profit margins:

Company

Sales Growth

Gross Margin

Net Profit Margin

Market Cap (Billions)

Buffalo Wild Wings (NASDAQ:BWLD)

16.5%

42.1%

5.6%

$3.6

Chipotle Mexican Grill (NYSE:CMG)

14.1%

27.7%

11.6%

$23.4

Dunkin' Brands Group (NASDAQ:DNKN)

10.7%

83.3%

22.4%

$4.0

Popeyes Louisiana Kitchen (NASDAQ:PLKI)

10.6%

66.2%

17.0%

$1.3

Starbucks (NASDAQ:SBUX)

17.5%

31%

19.9%

$89.3

Gross margin is total revenue after factoring in the cost of goods sold, and net profit margin is profit after overhead, administration costs, taxes, and interest payments, distributions to shareholders, and so on.

All of these companies are riding a strong tailwind of growth from the past year and have demonstrated the ability to convert those sales into healthy net profits. As more families head out the door to grab a meal or something to drink, the battle to capture that sale is growing increasingly competitive. Let's compare these trailing-one-year numbers with expected one-year sales growth for these businesses, as well as current stock valuation metrics:

Company

Sales Growth

Earnings Growth

Forward P/E (Next Fiscal Year)

PEG Ratio

Buffalo Wild Wings

20.3%

26.7%

26.2

0.98

Chipotle Mexican Grill

14.8%

19.0%

35.0

1.84

Dunkin' Brands Group

6.0%

15.8%

19.2

1.22

Popeyes Louisiana Kitchen

11.1%

17.4%

25.8

1.48

Starbucks

11.3%

19.0%

31.9

1.68

While all of these popular restaurants and eateries have been posting good top- and bottom-line numbers over the past year, forward estimates show a diverging story. While profit as measured by earnings is still expected to rise for coffee chains Starbucks and Dunkin' Brands, sales are expected to grow at a slower rate. Sales growth is expected to continue to pick up for the restaurants I've listed, although increases seem to be leveling for Chipotle and Popeyes. That leaves us with what I believe could be a big winner in the fiercely competitive restaurant industry: Buffalo Wild Wings.

The stock is up about 5% for 2015, but it has good momentum in past sales growth and earnings growth. The company also has very little debt on its books, which is a net positive for a company expecting to increase the number of hungry sports fans it serves. It's also noteworthy that its PEG ratio (forward price to earnings divided by expected growth in earnings) is indicating a discount when compared with many competitors, including the other restaurants I've listed here. (I think it's also worth comparing Buffalo Wild Wings with direct competitor Wing Stop, which has a current PEG ratio of 2.52, indicating a steep price for anticipated future growth when compared with other restaurant chains.)

American appetites for meals outside the home are on the rise. Should this trend continue, it has the potential to be a rising tide that benefits many in the food and drink services industry. Keeping an eye on restaurants that are attracting consumers and packing the house should be an interesting endeavor for investors going forward.

Nicholas Rossolillo has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Buffalo Wild Wings, Chipotle Mexican Grill, and Starbucks. The Motley Fool recommends Popeyes Louisiana Kitchen. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.