The near-term outlook for the restaurant sector looks promising with nearly 78% having had at least one COVID-19 dose and consumers spending more. We believe it is a smart move to invest in fundamentally sound stocks such as Starbucks (SBUX), RCI Hospitality(RICK), Chuy Holdingss (CHUY) and Good Times Restaurants (GTIM). They are each ‘Strong Buy’ or ‘Buy’ rated in our proprietary POWR Ratings system. Let’s discuss these names.The restaurant industry faced several operational challenges due to social distancing requirements amid the COVID-19 pandemic, and emerging new variants of the deadly virus continue to impact the industry. Many restaurants managed to stay afloat through their focus on services off-premises such as delivery, take-out, and drive-throughs.

The restaurant sector is likely to see a steady recovery with approximately 77.7% having had at least one COVID-19 vaccination and the slow easing of social distancing norms. The National Restaurant Association reports that 2021 will see $789 billion worth of food and beverages in restaurants and foodservice, an increase of 19.7% over 2020.

Given this backdrop, we think quality restaurant stocks Starbucks Corporation (NASDAQ:), RCI Hospitality Holdings Inc. (RICK), Chuy’s Holdings Inc. (CHUY), and Good Times Restaurants Inc. (GTIM) look like solid bets. Our proprietary POWR Ratings give them an A or B rating.

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