More Stocks – QSR

More Stocks – QSR

There is nothing better than seeing a pullback in a stock that you would like to buy more of. Luckily that happened with Restaurant brands International. This bundle of 3 great companies is fantastic and with 3G’s leadership the sky is the limit.

Now I know here in Canada, Tim Horton’s really doesn’t have the same reputation it used to have. I have heard people say 3g destroyed the brand etc etc. I think 3g has finally stepped to the plate and started resolving these issues. (Besides that recent franchisee who disclosed confidential information and lost his 4 Tim Horton’s restaurants.)

I know people personally who need their daily “Tim Horton’s coffee”, The drive through’s are still packed and business seems good.

While this stock still comes with a little drama, the potential is really there. Popeye’s  has just entered its first major master franchise development agreement in Asia. The Philippines! My wife is a Filipino and they do like their chicken and rice. Tim’s entering China should be good, but also seems like it could be really competitive.

Personally Burger King is my favorite of all the burger fast food places. And I have stated it a couple times. There is nothing better than buying stocks that you use yourself. Might as well own a piece of the business your buying something from anyways!

So we got 3 solid brands, all offering something different. Maybe they will add a pizza franchise soon enough, although I don’t mind them paying off their debt either. (Just seems to be a couple cheaper pizza brands in the market at the moment)

The Purchase

Less than a month ago the stock was trading over 81 bucks a share. After their last earnings report, I think people wanted more (Although the results overall were still good) and the stock plummeted. Is this the bottom? I dunno, but I’ll gladly pay around 74 bucks for a share.

I bought 13 shares for $74.54 each last week before the ex dividend date.  In total it will add 23.40 usd to our forward income. Since our Canadian dollar is so crappy at the moment this offered a yield of over 3.14% which is absolutely solid!

The price to earnings ratio was at 12.3 times. Man that’s cheap for a company with so much potential and with solid leadership.

Qsr has a 52 week high of $88.36 and a 52 week low of $67.55. So at the price I paid, it’s 15.64% off its high and %10.64 above its low. So a little cheaper than the middle.

While they aren’t a dividend aristocrat or anything, they have a solid history of raising their dividend since 2014. Including their massive 114% raise this year! I think its safe to say the ownership is a shareholder friendly company.

Conclusion

Good progress against ‘Winning Together’ plan to drive improved comparable sales at TIM HORTONS®
BURGER KING® continues system-wide sales growth and crosses 17,000 restaurants worldwide
POPEYES® achieves double-digit profitability growth through accelerated restaurant expansion

Source – RBI’s most recent press release (August 1st, 2018)

I think the recent pullback is just a bump in the road and a great opportunity to add to our positions. (or start one) There seems to be a lot of potential, its got a cheap p/e ratio comparing to others in the same industry and Fast food generally holds up pretty well in a recession. Not saying we are having one soon or anything, but the defensive nature is a nice bonus!

What are your thoughts on the purchase or qsr in general?

As always please do your own research before making a purchase.

Cheers!

Rob

Hey I’m Rob, creator of Passive Canadian Income.

In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.