Investors in Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR) may be dismayed at the steep drop shares of this fast food conglomerate saw during the first-quarter volatility we experienced.
That said, this stock’s relatively rapid rebound toward previous highs made earlier this year is bullish generally and provides a pathway to additional capital appreciation if investors do believe this pandemic will be sorted out sooner than later.
The sheer scale of Restaurant Brands’ operations gives investors a lower risk profile off the bat. With approximately $834 Billion U.S. in systemwide sales and 24,000 restaurants globally, the company’s footprint is impressive.
Restaurant Brands has been able to grow its footprint over time in a capital-light fashion, given approximately 99% of its locations are owned by franchisees. This is a huge factor in why I see Restaurant Brands’ acceleration out of this pandemic while many of its peer’s struggle to get started.
Restaurant Brands’ management team has done an excellent job with many innovations. In particular, the Popeye’s chicken sandwich and Impossible Whopper at Burger King have greatly outperformed expectations.
While Tim Hortons remains the brand that is sputtering at the moment, I have faith in the ability of Restaurant Brands’ management team to grow its franchises in tandem and push for international expansions which have been on hold largely due to the COVID-19 pandemic. This stock has great value today, driven in part by these factors.
Invest wisely, my friends.