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Illustration: Sarah Grillo/Axios

Investors are scrambling to get their hands on next-generation meatless and agrifood technology companies, but the past couple of years have proven very lucrative for old-fashioned fast-food chains.

Why it matters: While legacy brands like Kraft Heinz and Campbell's are losing market share as consumers' tastes and shopping habits change, fast-food legacy names like McDonald's and KFC/Taco Bell owner YUM! Brands are seeing all-time high stock prices.

  • It's thanks in large part to investments in digital engagement and third-party delivery that have turbocharged sales and revenue in recent quarters.

By the numbers: Restaurant stocks have outperformed the S&P 500 by 13% over the last 12 months and valuations are up 16% year over year, analysts at Goldman Sachs said in a Monday note to clients.

  • Quick service and fast-casual restaurants — including traditional fast-food and pricier chains like Chipotle and Shake Shack — are doing even better, outperforming the S&P by 14% year-to-date and 27% over the last 12 months, Goldman analysts led by Katherine Fogertey said in the note.
  • McDonald's has seen its stock hit all-time highs 18 times in 2019, according to ETFTrends.com.
  • Even last year, when the S&P fell 6.2% overall, 5 companies from the fast-casual restaurant sector posted annual gains of 30% or more, led by Wingstop, which rose 65%.

The big picture: Even better for investors, "fundamentals are accelerating," Goldman analysts say, calling for 28% upside for Chipotle's stock — it touched a record high just last week — to $1,000 a share.

  • "Restaurants is a rare sector in the market that doesn’t yet face Amazon encroachment — digital is helping to drive growth and profits."

Between the lines: The fast-food industry's biggest tailwind is coming from a surprising source — the increased pay of low-wage workers.

  • After trailing higher-paid workers for years since the financial crisis, earnings for the bottom 25% of workers have been growing at a rate much faster than the national average, and weekly earnings for the bottom 10% of full-time workers have grown even faster, data shows.
  • Generally, rising wages would be seen as a negative for the industry, but coupled with stable gas prices, the increasing paychecks of low-wage workers means more money spent at fast-food and fast-casual restaurants.

Be smart: Goldman's research team estimates 70% of the industry's sales growth over the past 5 years can be explained by rising wages, lower gas prices and a boost from third-party apps like GrubHub and Uber Eats.

Go deeper: More than one-third of Americans report eating fast food every day

Go deeper

Updated 47 mins ago - Politics & Policy

Omicron dashboard

Illustration: Brendan Lynch/Axios

  1. Health: The end of the Omicron wave is in sight — Transplants rebound from COVID lull — Omicron hits American hospitals disproportionately hard
  2. Vaccines: WHO: No evidence that healthy children, teens need boosters — Kids' COVID vaccination rates are particularly low in rural America — Starbucks drops worker vaccine or test requirement after SCOTUS ruling
  3. Politics: Biden concedes U.S. should have done more testing — Arizona says it "will not be intimidated" by Biden on anti-mask school policies— Government website for free COVID tests launches early
  4. World: WHO: COVID health emergency could end this year — Greece imposes vaccine mandate for people 60 and older
  5. Variant tracker

Highlights from Biden's marathon 2-hour press conference

President Biden answers questions during a news conference in the East Room of the White House on Jan. 19. Photo: Chip Somodevilla/Getty Images

President Biden Wednesday marked the end of his first year in office with a marathon press conference from the White House East Room, during which he defended his record in office and made headlines on several fronts.

Why it matters: It was only Biden's second solo presser while in office. The president said he would support splitting his flagship budget bill, the Build Back Better Act, to pass it in increments. He also called on the Federal Reserve to do more against inflation, and predicted that Russia will invade Ukraine.

Supreme Court rejects Trump's attempt to shield documents from Jan. 6 committee

Photo: Melissa Sue Gerrits/Getty Images

The Supreme Court rejected on Wednesday night a bid by former President Trump to block the release of documents and records from his administration to the House committee investigating the Jan. 6 riot at the Capitol.

Why it matters: Trump asked the Supreme Court to step in and block the release of the documents last month after a panel on the U.S. Court of Appeals for the D.C. Circuit unanimously denied his attempt to prevent the committee from obtaining the materials.