Beyond the Hype: Here’s the Real Reason Restaurant Brands (TSX:QSR) Stock Is a Buy

There’s a solid reason to buy Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR) right now, but it’s not what you might think.

| More on:

I’ll be honest: I don’t know whether or not Tim Hortons still sells its version of a poutine. I tried it when the company started selling it last summer, though. If you found yourself making the same culinary decision as I did back when the Timmies poutine debuted, you’ll know that innovations in the Tim Hortons menu can be a little hit or miss.

However, this isn’t the only reason why I’m giving the mash-up of Beyond Meat (NASDAQ:BYND) and Restaurant Brands International (TSX:QSR)(NYSE:QSR) some side-eye right now.

Sure, Beyond Meat has rocketed since its appearance on the NASDAQ, which is great if you got invested early on and got out when it peaked. Indeed, there may still be room for upside in this stock if you time it right. As a direct investment, it’s certainly intriguing. Indirect investment by snapping up Canadian retailers of its goods may offer some watered-down exposure, as can the iShares S&P/TSX Capped Consumer Staples Index ETF.

However, let’s look beyond Beyond Meat and its volatile share price to see what else is cooking behind the scenes at Restaurant Brands. Because while Beyond Meat is undeniably an interesting stock, having soared and plummeted as precipitously as any other risky investment, its impact on Restaurant Brands is unlikely to be hugely significant in the long run now that the honeymoon is over.

Can Restaurant Brands hit $100 by the end of the year?

It’s certainly possible. Restaurant Brands is a solid choice for investors looking for a recession-ready consumer staples stock with growth and innovation behind it. Adding meat-free options to its menus is a clever play in a market facing a growing percentage of vegan and vegetarian consumers and could see the stock hit the $100 mark if sales continue to grow.

Pushing Tim Hortons into new territory over in China sure won’t hurt, either. With thousands of the budget coffee and snack outlets set to roll out across one of Canada’s two largest international trading partners, the possibility for massive growth could silence the naysayers once and for all. Indeed, even the most cynical passive-income investor may find themselves adding Restaurant Brands to their long-term portfolios before too long.

Factored into a revenue stream that includes such giants as Burger King and Popeyes, both of which are beating Tim Hortons in terms of year-on-year growth, and the China expansion is perhaps the most solid reason to buy shares in Restaurant Brands right now. You might want to buy shares fairly soon to lock in its tasty forward dividend yield of 2.96% before it shrinks like an overcooked patty, however.

The bottom line

The short-term boost to Restaurant Brands’s share price on the news of its deal with Beyond Meat has pushed the former stock back into the spotlight of late. It’s worth looking beyond the hype, though, and remembering not only that Restaurant Brands was already a strong investment, but also that its performance won’t be limited to that of the NASDAQ newcomer in the long run.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. The Motley Fool owns shares of RESTAURANT BRANDS INTERNATIONAL INC and has the following options: short October 2019 $82 calls on Restaurant Brands International.

More on Dividend Stocks

Investor reading the newspaper
Dividend Stocks

Emerging Investment Trends to Watch for in 2025

Canadians must watch out for and be guided by emerging investment trends to ensure financial success in 2025.

Read more »

RRSP Canadian Registered Retirement Savings Plan concept
Dividend Stocks

Watch Out! This is the Maximum Canadians Can Contribute to Their RRSP

We often discuss the maximum TFSA amount, but did you know there's a max for the RRSP as well? Here's…

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

Outlook for Fortis Stock in 2025

Fortis stock is up 10% in 2024. Are more gains on the way?

Read more »

Canadian energy stocks are rising with oil prices
Dividend Stocks

3 Low-Volatility Stocks for Cautious Investors

As uncertainty grips the market, here are three low-volatility stocks you can buy and hold with confidence.

Read more »

sale discount best price
Dividend Stocks

Time to Buy! 1 Dividend Stock That Hasn’t Been This Cheap in Years

This dividend stock provides practically everything: a stable income stream, steady occupancy rates, and more growth to come.

Read more »

jar with coins and plant
Dividend Stocks

The Smartest Dividend Stocks to Buy With $2,000 Right Now

Given their stable cash flows and consistent dividend growth, these two dividend stocks are ideal additions to your portfolios.

Read more »

Muscles Drawn On Black board
Dividend Stocks

Canadian Defensive Stocks to Buy Now for Stability

Two TSX defensive stocks offer capital protection and stability for risk-averse investors

Read more »

worker carries stack of pizza boxes for delivery
Dividend Stocks

Monthly Dividend Leaders: 3 TSX Stocks Paying Dividends Every 30 Days

These TSX stocks offer monthly dividends and attractive yields of more than 7%, making them top stocks for passive income.

Read more »