Texas Roadhouse, Inc. (TXRH)

The model is simple and hard to execute: prices below comparable steakhouses, larger portions, meat cut on site. As a result guest traffic per restaurant is among the highest in the industry, and fixed costs are spread across more orders — hence profit at a modest mark-up.

The company deliberately does not raise prices as fast as competitors, sacrificing margin for occupancy: in a downturn the guest leaving expensive venues comes here. The flip side is sensitivity to beef prices, which rise for years when the cattle herd shrinks. Risks: food costs and labour. Most restaurants are company-operated, so all the revenue stays in house rather than arriving as a royalty. A dividend is paid and raised.