Restaurant stocks are bigger than you may realize. Over the years, they’ve attracted a lot of attention from prominent investors such as Warren Buffet, who has even taken a sizeable share in this first company.
Restaurant Brands International Inc.
Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR) was formed from the merger of two iconic brands: Tim Hortons and Burger King. While that merger left a massive amount of debt for the combined company to deal with, what the company has done over the past few years is nothing short of impressive: it’s leveraged the strength of each.
Tim Hortons is easily Canada’s most iconic brand, about as synonymous to Canada around the world as the CN Tower or hockey are. Unfortunately, Tim Hortons doesn’t exactly have the large network of international locations worthy of the near-legendary status the chain has in Canada, despite a growing network of fans longing for a double-double.
Enter the franchise expertise of Burger King, and we have a series of master franchise deals over the past few months that will result in Tim Hortons locations opening in both the U.K. and the Philippines, which should be a springboard to expand into other nearby markets.
Just this week, the company announced a similar expansion into Mexico.
Restaurant Brands remains a great investment over the long term thanks to the work the company has done integrating operations and setting up future growth prospects, such as expanding the core brand portfolio to new markets.
If you have any doubts about investing in Restaurant Brands, consider that in 2016 the company provided a 25.2% total return to shareholders.
Pizza Pizza Royalty Corp.
Who doesn’t love pizza? Pizza Pizza Royalty Corp. (TSX:PZA) is the largest pizza-store operator in Canada with over 700 locations across the country between two brands. Moving into what is Pizza Pizza’s busiest weekend of the year, there’s plenty to love about this stock.
Pizza shops across the country have evolved over the past few years, expanding into new areas and providing new food options. While this has made the market more competitive, it has also resulted in some of the larger players in the market speculating that some form of consolidation could be around the corner.
For the time being, Pizza Pizza remains at the helm, offering a very attractive monthly dividend in the amount of $0.0713 per share, which amounts to a handsome 4.88% yield. Even better, the company has increased the dividend in each of the past few years and looks likely to continue the trend this year.
Apart from the great dividend, what attracts me to Pizza Pizza is steady yet impressive growth the stock has been subject to over the past few years. In the past year, the stock has appreciated by 38%, and despite being the largest pizza chain in the country, Pizza Pizza still has locations in only five provinces, meaning that the potential for this successful chain to branch out to the rest of the country is huge.
