Topics Growth Stocks

Restaurant Brands International $41.68 - New York symbol QSR

RESTAURANT BRANDS INTERNATIONAL $41.68 (New York symbol QSR; TSINetwork Rating: Average) (905-845-6511; www.rbi.com; Shares o/s: 467.0 million; Market cap: $19.5 billion; Dividend yield: 1.4%) is the world’s third-largest fast-food operator, after McDonald’s (No.1) and Yum Brands (No.2), with 4,438 Tim Hortons stores and 15,008 Burger King outlets in 100 countries.

If you exclude restructuring costs and other unusual items, the company earned $142.1 million in the three months ended March 31, 2016 (all amounts except share price and market cap in U.S. dollars). That’s up 92.3% from $73.9 million a year earlier. Due to more shares outstanding, earnings per share rose 87.5%, to $0.30 from $0.16.

The higher profits came mainly from lower costs and the introduction of higher-profit menu items.

Sales fell 1.6%, to $918.5 million from $933.3 million. However, if you exclude the negative impact of the U.S. dollar on Restaurant Brands’ overseas operations, sales in the quarter gained 6.0%.

Tim Hortons’ same-store sales rose 5.6%, thanks to its new pulled-pork and croissant-breakfast sandwiches. Strong demand for coffee and other beverages also boosted sales. Burger King’s same-store sales gained 4.6%, also due to new items such as grilled hot dogs.

Restaurant Brands raised its quarterly dividend by 7.1% with the July 2016 payment. The stock now yields 1.4%. The company’s outlook is positive, but it trades at a high 32.8 times its forecast 2016 earnings of $1.27 a share.

Restaurant Brands is a hold.

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