3 Great Brands – Burger King, Popeyes and Tim Hortons. All of them stayed open during the pandemic. Each of them got some of our money in the last couple months. While restaurants will certainly take a hit during this whole ordeal, Drive-throughs remained busy.
In my opinion, Restaurant Brands International aka QSR is the best restaurant stock on the TSX.
I love each of these names.
Tim Hortons is a staple here in Canada with lineups extending onto the streets at peak times. Personally, I don’t see the point of going each day and waiting in the lineup just for a coffee while I drive. I would rather make a coffee at home and take it to go, but when we are going camping or another long drive I enjoy a Tim’s coffee and a couple dozen Timbits…. relax it’s for the kids too! (but I’ve been known to tackle a baker’s dozen no problem)
- 4,800 system-wide restaurants located in Canada, the United States and around the world
Burger King – My favorite fast-food burger joint. Their chicken sandwiches and burgers are top-notch. Some people don’t really like Burger King. We live in a weird world these days, whopper Wednesdays! Tastes good and light on the wallet, what’s not to like?
|How To Consistency Beat the Market With Over a 90% Success Rate
Whether the market is up, down, or sideways, the Option Strategies Insider membership gives traders the power to consistently beat any market. Spend less than one hour a week and do the same.
Just click the link below to see our full presentation on exactly how we do it.CLICK HERE TO JOIN OUR FREE WEBINAR
- 17,800 locations in more than 100 countries and U.S. territories
Popeyes – I knew this brand had potential, but they have really grown on me. I love their gravy and the wife loves their biscuits. I don’t love when they count your chicken tenders wrong and give you 11 instead of 14 though… agh! Should have counted them at the store. You would think people can count to 15, but I guess not. Bring that chicken sandwich to Canada – I wanna try it!
- over 3,100 restaurants in the U.S. and around the world
You like DGI, eh?
Seriously though mmm! Makes the mouth water just thinking about them. Know what else makes the mouth water? Dividend raises… QSR has treated us very well in this department.
They haven’t been around long but their 3-year dividend growth rate is a whopping 47.75%. Yup, you read that right. Clearly, this ain’t sustainable and will go down drastically but based on the restaurant numbers above, there is a tonne of growth possibilities for Tim and Popeyes.
The guys at 3G know the franchise business well and are implementing what they know into all the brands and expanding into new markets.
The Elephant In The Room
This has left a bad taste in the Tim Hortons brand and some say it’s not what it used to be. Same-store sales have diminished recently but they are really focusing on reinvigorating the brand here in Canada now. I believe they will pull it off. They made some great changes with the roll-up the rim campaign but the whole COVID-19 thing really threw a wrench in those original plans. People want to see more reusable cups these days, but they couldn’t accept them due to germs.
They have really developed their online presence and even offered free delivery with Uber Eats for a while there.
Starbucks (NASDAQ:SBUX) recently disclosed that they could be closing up to 200 stores in Canada over the next 2 years. That’s 15% of their Canadian stores. I’m sure QSR is licking their chops about regaining that market share.
I do wonder if the working at home trend will hurt Tim’s sales even more moving forward, but based on what I see driving by them it’s not.
I added to our existing position 15 more shares. Not enough to drip it yet, but I plan on continuing to grow this position. We purchased them for 74 bucks and change a share on Friday, just before their ex-dividend date.
At the time the yield was about 3.8% and this purchase adds 31.20 USD to our forward dividend income. Not huge, but once you convert that to Canadian, oh boy!
Is it a steal at this price? Not exactly, March would have been better. But I’m a huge fan of holding companies that I love and feel this is a good starting yield to boot.
Speaking of people buying QSR, did you see how much more shares of QSR Bill Ackman and Pershing Square Capital Management added?
According to a SEC filing, Ackman and Pershing Square now own a combined 29 million shares, or 9.6% stake in Restaurant Brands, up from about 6.6% previously. (Article here)
A massive Purchase, he must be a fan as well. Is he a whopper man or a big king kinda guy? who knows, maybe he just loves to wear those crowns they give to kids.
Well, 15 more shares and now 61 in total. $126.88 USD a year, not bad. Always loving stocks hitting over that 100-mark. I think the future looks bright for QSR. While everything is opening back up these days, if we do get a second or third wave, fast-food is a good place to be. Their debt level is a little higher than I’d like, hopefully they focus on lowering that moving forward.
If you could only eat at one fast-food chain what would yours be? Are you still buying anything these days or waiting for that pullback?
Have a great day
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.