How to Invest in Chipotle Stock (CMG)

What is Chipotle?

Chipotle, the booming fast-casual Mexican chain of restaurants, shouldn't even be here. The chain was founded in 1993 at a former Dolly Madison ice cream shop in Denver by a Culinary Institute of America graduate who wanted to make some quick cash so he could open a fine-dining establishment.

Steve Ells, the company's founder, borrowed $80,000 from his father to outfit the 850-square-foot restaurant. Since space was at a premium, Ells designed an open kitchen that's still a feature of Chipotle restaurants around the country.

Chipotle was designed as a testing ground for a future, upscale Ells restaurant that would serve fresh, whole, and unprocessed food from responsible sources. First-day sales were only about $240, but the concept gained momentum, partially due to its location across the street from the University of Denver. The success prompted Ells to open a second Chipotle in 1995, a third in 1996, and another 3,500-plus restaurants by 2024, including forays into Canada, the U.K., France, and Germany.

Despite its growth, Chipotle hasn't always enjoyed accolades. Ells and his co-CEO were criticized in 2014 for compensation packages that approached $50 million. The chain was linked to separate E. coli, salmonella, and norovirus outbreaks in 2015, significantly denting its reputation for serving fresh and safe food. Bill Ackman and his Pershing Square hedge fund took a 9.9% stake in the company in 2016, moving quickly to salvage the chain's battered name.

Ells was replaced as CEO in 2018 by Brian Niccol. The former CEO of the Yum! Brands (YUM -0.65%) Taco Bell chain succeeded Ells as chairman of the board of directors in 2020 before leaving to head up Starbucks (SBUX -0.07%) in August 2024. Although the company announced the closing of 65 restaurants in 2018, it said only five years later that it planned to almost double the number of establishments to 7,000.

Despite criticisms on a number of fronts that range from high caloric and sodium content to smaller-than-expected portion sizes, the restaurant chain also draws praise for its efforts to serve responsibly sourced foods. Its statement of values notes that Chipotle was "born of the radical belief that there is a connection between how food is raised and prepared, and how it tastes."

How to buy Chipotle stock

1. Open your brokerage app: Log in to your brokerage account where you handle your investments.

2. Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.

3. Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.

4. Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.

5. Submit your order: Confirm the details and submit your buy order.

6. Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

Should I invest in Chipotle?

As with any other investment, there's a short answer to why you might consider investing in this stock: It depends.

You may want to skip Chipotle stock if:

• You believe that competing restaurants will take a bite out of Chipotle’s market share.
• You're worried about the periodic food safety issues that have plagued the chain.
• You expect inflation will continue to increase food costs.
• You think Chipotle shares are trading at unrealistically high prices.
• Your portfolio already has enough restaurant stocks.

On the other hand, you may want to go ahead and buy Chipotle stock if:

• You believe the fast-casual dining space will continue to make inroads into the fast food industry's customer base.
• You believe Americans will continue to appreciate Chipotle's commitment to responsibly sourced ingredients.
• You think the recent decline in inflation will eventually trickle down to restaurants.
• You'd like to balance your portfolio with a restaurant stock.
• You think Chipotle stock is undervalued and will increase as the number of restaurants continues to expand.

Is Chipotle profitable?

Chipotle is quite profitable, and the restaurant industry is currently in a good place when it comes to profitability. According to the National Restaurant Association, the food service industry was expected to hit $1.5 trillion in sales in 2025, adding 200,000 jobs -- almost one of every 10 Americans in the civilian labor force.

Chipotle reported a net income of $386.6 million in the first quarter of 2025, a 7.6% increase from the first quarter of 2024, despite higher food, beverage, and packaging costs. Total revenue increased 6.4% to $2.9 billion. Operating margins at its restaurants rose to 16.7%, up from 16.3% in the first three months of last year.

The company also gained market share during the first quarter, capturing 6.9% of dining dollars in the fast-casual sector, according to CSIMarket, a private research organization. Since fast-casual restaurants attract more affluent diners, Chipotle is somewhat insulated from downturns that typically affect companies like PepsiCo (PEP -0.98%) and McDonald's (MCD -1.00%).

Does Chipotle pay a dividend?

Chipotle doesn't pay a dividend. Instead, the company puts its money into the business and into share repurchases, which tend to reward investors by increasing the price of a stock. The company announced in its most recent fourth quarter that it would increase its total repurchase authorization from $700 million to $1 billion.

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