This year, the performance of catering stocks has shown a clear divergence, and this may be related to the number of brands they possess.

The stock prices of Brinker International, Darden Restaurants, and Restaurant Brands International have risen by approximately 32%, 18%, and 12% respectively so far this year. Each of these companies owns more than one chain restaurant brand, including Chili, Olive Garden, LongHorn Steakhouse, Burger King, and Tim Hortons, among others.

At the same time, stocks such as McDonald, Chipotle, Cava, Wendy, Shake Shack, and Domino have all seen declines this year, with several of them experiencing double-digit drops. Each of these companies has only one core chain brand.

These stock price changes highlight the advantages of a diversified catering business as seen by some analysts, especially in a situation where any mistake could cause cash-strapped consumers to turn to other restaurants.

As large catering companies begin to release their quarterly results starting next week, investors will further observe how operating multiple chain brands—or not operating any brands at all—will affect their financial performance. One company worth paying attention to is Inspire Brands, which owns chain brands such as Dunkin, Buffalo Wild Wings, and Jimmy John and is moving towards going public.

A business built around a single restaurant concept relies more on that brand's ability to continuously attract consumers; whereas companies with a portfolio of brands can still find other sources of sales if one brand loses its momentum.

Some Wall Street analysts believe that this buffering effect could be crucial, but only on the premise that another chain brand is strong enough to fill the gap.

Mizuho Securities Food and Beverage Analyst Nick Setyan stated: " Darden might be the best case in terms of scale, size, and business diversity. If one business performs poorly, the others can make up for it."

According to Setyan, over the past few quarters, this trend has been evident between Darden's core brands Olive Garden and LongHorn Steakhouse. In the past few months, the growth rate of LongHorn has been faster than that of Olive Garden; in the most recently released quarter, LongHorn saw a same-store sales increase of 6.2%, while Olive Garden experienced only a 1.1% increase.

In a research report in October, KeyBanc Capital Markets also regarded the breadth of the Darden brand portfolio as a positive factor, stating that it allowed the company to “reach a wide range of consumer groups.” The company’s high-end and casual dining businesses may be more advantageous in a “K-shaped economy” where consumer spending varies depending on income levels.

The institution has given a rating equivalent to a ‘buy’ for Darden, with a target price of $237, while as of Thursday the stock price was around $215.

Similarly, Restaurant Brands International provides exposure in different categories and markets through Burger King, Tim Hortons, and Popeyes. However, its brand portfolio cannot completely isolate the impact of a weak brand.

In the second quarter, the same-store sales growth rate of Burger King in the United States accelerated from 5.8% in the first quarter to 8.5%; at the same time, the same-store sales growth rate of Tim Hortons in Canada slowed down from 1.5% to just 0.1%. This means that, while Tim Hortons is stagnating, Burger King has taken on more responsibility for driving overall performance in order to turn the situation around.

Setyan indicates that the recent strong performance of Burger King is at the core of the company's momentum, which is attributed to its ability to better convey its low-priced products to consumers amidst the slowdown in McDonald's sales growth.

"If it weren't for the current performance of Burger King, I don't know if [Restaurant Brands] would perform so well," he said.

Mizuho began to replace Restaurant Brands on October 20th, assigning a rating equivalent to a buy and a target price of $85. As of Thursday, the trading price of the stock was around $76.

However, focusing on a single brand can also be an advantage. Starbucks and Cheesecake Factory have been highlights among the catering stocks this year, demonstrating that when execution is thorough and consumer demand is aligned, a clear brand positioning and investment can also lead to exceptional performance. Their stock prices have risen by 21% and nearly 123% respectively this year.

As for Starbucks, the company stated that it will not acquire Chipotle, despite previous reports suggesting that it had considered a large-scale acquisition deal which could have diversified its business.