Dunkin' Stock Is Winning The Coffee War — For Now

Coffee lovers can debate which of their caffeine fixes are superior between Dunkin Brands Group Inc DNKN and Starbucks Corporation SBUX. But one thing isn't up for debate: which is the superior-performing stock.

The Analysts

Matt Maley, equity strategist at Miller Tabak, and Chantico Global CEO Gina Sanchez were guests on a recent CNBC "Trading Nation" segment to discuss the two coffee chains.

What The Chart Is Saying

Shares of Dunkin' Brands, the parent company of Dunkin' Donuts, are up 53 percent over the past two years, while Starbucks' stock is higher by just 12 percent over the same time period.

Taking a look at the near-term performance, Dunkin's stock is the clear winner among the two, up 25 percent since April, Maley said. But from a strictly technical basis, Dunkin's upside looks "somewhat limited," as it appears to be overbought from a short- and long-term perspective, he said. 

Dunkin's relative strength index is above the 70 threshold, which may imply it is overbought by investors, he said. Shares are trading at a 13-percent premium to its 200-day moving average.

On the other hand, Starbucks' stock has been "stuck in a sideways range" since 2015 between $52 and $63 per share, Maley said. If shares hold above the $52 level, it may be enough to give the stock momentum to move back to the middle of the $52 to $63 range, he said. 

What The Chart Isn't Saying

What Starbucks' stock charts aren't showing is that the coffee chain is experiencing a fundamental problem, Sanchez said.

The coffee giant said it needs to close 150 underperforming stores in 2019, which implies it is now looking like a "very, very mature company."

The fundamentals "don't add up" for Starbucks, and while Dunkin' Donuts is much smaller in size, it is the company that "has the wind in its back," Sanchez said. 

Price Action

Dunkin Brands shares were down 2.26 percent at $69.58 at the close Friday, while Starbucks shares were up 1.36 percent at $52.15. 

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