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4 Reasons to Consider Restaurant Brands International Inc. Today

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Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR) may not have the most recognizable name, but the company is the parent behind some of the biggest and most successful fast-food chains around the world, including Burger King, Tim Hortons, and Popeyes Louisiana Kitchen.

While owning three successful brands is not reason enough to consider an investment, the following reasons set out a great case for considering an investment in Restaurant Brands.

Great management

When Restaurant Brands was formed several years ago through the merging of Burger King and Tim Hortons, some critics spoke harshly of the deal, citing that it would take years of integration efforts to realize any savings from operations, and that the significant debt load assumed in the deal would hinder growth.

To say those critics were wrong would be an understatement.

Over the course of the past year, Restaurant Brands has seen its stock price jump over 20%, and looking out over the past two years, that increase is bumped to just over 50%.

Much of that growth is a testament to the superb management of the company. 3G Capital, which acquired Burger King back in 2010, put in place a system of rapid expansion, which the company now plans to emulate with the recent acquisition of Popeyes.

In many ways, Burger King’s success over the past years, thanks to 3G Capital, is becoming the blueprint for both Tim Hortons’s and Popeyes’s expansion plans.

Expansion: doing what works

When Burger King and Tim Hortons combined, they both had their share of weak spots. For Tim Hortons, part of that weakness was that the company had amazing brand equity within Canada, but it had very little, if any, expansion internationally.

Burger King, however, had a massive international footprint that utilized a very successful master franchise/franchisee model that continues to produce results today. By way of example, a master franchise agreement for Burger King to enter Taiwan was announced just last week.

The solution applied at the time was to have Tim Hortons follow that same model, which it did. Today, Tim Hortons has expanded into the U.K., the Philippines, and Mexico, with other locations set to be added.

Popeyes arguably has a similar issue, although it’s not as dire. The chain has a minimal footprint outside the U.S., with a presence in nearly 30 countries, but the potential for expansion is much higher, as Popeyes’s unique, yet popular menu could easily branch out to many countries.

That’s not to say the company is neglecting the already developed domestic markets. Just this month, the company noted that it is considering providing a delivery service for Burger King.

Results: for today and tomorrow

Restaurant Brands reported on activities for the third fiscal quarter this past fall. Results continued to highlight strong growth potential. Total revenue for the quarter came in at $1208.6 million, beating the $1,075.7 million reported in the same quarter last year. Net income attributable to shareholders came in at $91.4 million for the quarter, representing an increase over $86.3 million reported in the same quarter last year.

System-wide sales growth across all three brands was noted, with Burger King seeing 11.2% growth, Tim Hortons seeing a 3% uptick, and Popeyes registering a 4.5% increase.

Looking ahead to the future, shareholders of Restaurant Brands can expect earnings to grow by double digits over the next few years, as the company continues to aggressively expand around the globe and bring costs in line.

A growing dividend

Restaurant Brands pays a quarterly dividend that provides a yield of 1.27%. While that hardly qualifies as an impressive yield, there are a few things to consider that make this a great option for income-seeking investors.

While Restaurant Brands is being conservative with the payout, the company has been increasing the dividend with frequency. In fact, the dividend payout has increased in each quarter in the past two years, surging from just $0.09 per share over two years ago to the most recent announcement of $0.27 per share.

That dividend is expected to continue growing over the next few years, particularly as the company continues to deliver strong results and new growth prospects.

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Fool contributor Demetris Afxentiou has no position in any stocks mentioned. The Motley Fool owns shares of RESTAURANT BRANDS INTERNATIONAL INC.

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