The Best Reopening Stock on the TSX?

Restaurant Brands International (TSX:QSR)(NYSE:QSR) is a dirt-cheap Canadian stock that investors should buy for a reopening

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Reopening stocks have taken a backseat of late amid the latest Delta-driven wave. Although the near- to medium-term future looks bleak, as cases continue to climb in various geographies, there is hope on the way, with booster shots and various new treatments that could arrive earlier next year. Undoubtedly, many think that the pandemic is on route to endemic over the next several months. And although that may give the thumbs up to go aggressive on the recently-soured reopening trade, investors must remember that the pandemic remains extremely uncertain. Vaccine hesitancy continues to be a major problem that could lengthen this pandemic.

Newly-discovered variants of interest, such as the “mu” variant, could become variants of concern. And they may drive the fifth wave at some point down the road. When it comes to future variants, nobody knows how much more infectious, virulent, or evasive they will be. That’s a major reason why reopening plays are starting to sag again, even as vaccine rates rise, albeit at a slower pace.

Focus on firms adapting to this new normal

At the same time, treatments, vaccine passports, and other safety protocols such as social distancing and masks could allow establishments to return to near-normal, even if the pandemic ends up dragging on through 2022 or even beyond. And let’s not discount an affected firm’s ability to adapt to the new normal. Many firms, including Restaurant Brands International (TSX:QSR)(NYSE:QSR), are taking steps to improve in areas that they were found lacking in last year. For QSR, drive-thru wasn’t quite up to speed versus the likes of some of its peers that better navigated the worst of last year’s lockdowns.

In any case, firms that are taking action to improve in the new normal that is worth picking up, even if you think variants of concern will keep us in a pandemic over the foreseeable future.

Without further ado, consider the following two reopening plays that I think boast an attractive entry point at the time of writing.

Restaurant Brands International: One of the best-reopening stocks out there

Restaurant Brands, the firm best known for being behind Tim Hortons, Burger King, and most recently, Popeyes, has been consolidating for around a year now. Despite the recent blowout quarter that saw profound strength on digital and hefty investments made to enhance the drive-thru experience over at Burger King, investors still don’t seem to be wanting to load up on shares.

COVID-19 variants and negative news relating to waves and restrictions could keep QSR stock in the $80 range for longer. But as the old Wall Street technician’s saying goes, “The bigger the base, the higher in space.” When the time comes for QSR to break out again, shares could blast off past the $100 very sharply. So, don’t sleep on the quality name just because of a lack of momentum, as it could change at the drop of a hat!

Shares of the name yield around 3.4%. The dividend is poised to grow fairly quickly over time, providing more than enough incentive to hold as the name flatlines going into year-end. My takeaway? It’s one of the better TSX reopening stocks out there. Don’t sleep on it.

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 Joey Frenette owns shares of Restaurant Brands International Inc. The Motley Fool recommends Restaurant Brands International Inc.

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