TIM HORTONS $66.99 - Toronto symbol THI

TIM HORTONS $66.99 (Toronto symbol THI; TSINetwork Rating: Average) (905-845-6511; www.timhortons.com; Shares outstanding: 134.3 million; Market cap: $9.1 billion; Dividend yield: 1.9%) is up 11%, near all-time highs, since reporting better-than-expected quarterly results on August 6.

In the three months ended June 29, 2014, Tim Hortons’ revenue rose 9.3%, to $874.3 million from $800.1 million a year earlier. That beat the consensus forecast of $843.3 million.

Same-store sales rose 2.6% at its Canadian locations and 5.9% in the U.S. These gains were mainly due to successful new menu items.

Earnings per share jumped 13.6%, to $0.92 from $0.81, beating the consensus forecast of $0.87.

The company now expects its full-year 2014 earnings to be at the upper end of its target range of $3.17 to $3.27 a share. The stock trades at 20.5 times the top of that estimate.

That’s still a reasonable p/e ratio in light of the company’s high market share in Canada and improving international growth prospects.

Tim Hortons is a buy.

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