Defensive Investing Is Important, So This Could Be the Smartest Move in the Market Right Now

Here’s one way investors looking to take a defensive posture on the market can do so, in this current macro environment.

| More on:
protect, safe, trust

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Most investors have been right to focus almost exclusively on growth stocks during this long-standing bull market cycle. Indeed, many top high-growth tech names have outperformed the more boring defensive stocks in the market.

But one company I’ve continued to pound the table on in recent years that’s performed as well or better than many top Canadian growth stocks is Restaurant Brands (TSX:QSR). The company continues to provide steady and consistent cash flow growth, which it passes on to investors via a dividend the company appears well-positioned to continue increasing over time.

Created with Highcharts 11.4.3Restaurant Brands International PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

For those looking for a top way to lean into the uncertainty in the market right now, here’s why Restaurant Brands is a company investors may want to consider.

Strong defensive business model

For those seeking a company with a truly defensive business model, a fast food operator like Restaurant Brands is an excellent choice. With world-class banners including Burger King, Popeyes, Tim Hortons, and Firehouse Subs under its umbrella, Restaurant Brands has a clear long-term global growth profile many investors are after.

Receiving its income from the franchise and royalty fees, as well as operational revenues from company-owned restaurants, this business model is certainly tilted in favour of investors. As consumers trade down to less expensive options when dining out, I expect Restaurant Brands could see market share growth in down economic cycles. Accordingly, for those looking to benefit from what may be an incoming recession or slowdown, this is a top way to play this trade.

Strong long-term growth prospects

Restaurant Brands aims to boost the store count from 31,070 in 2023 to 40,000 by 2028, with an annual addition of approximately 1,800 restaurants. The company also plans to revamp 600 of its newly obtained Carrols restaurants and expedite the expansion of Firehouse Subs in the U.S. and Canada.

Its primary emphasis for Popeyes is expanding its operating hours and making operational improvements. The company aims to increase Popeyes’s U.S. and Canada restaurant presence from 3,400 to 4,200 stores by 2028, all while enhancing its operational efficiency. 

Based on the information provided in the company’s press release, Restaurant Brands International anticipates that these collective strategies will result in an annual 8% increase in system-wide sales. In addition, the company expects an estimated 3% growth in comparable sales and a 5% expansion in net restaurant numbers.

The verdict

Restaurant Brands International stands out as one of the top TSX stocks due to its defensive appeal. It protects investments during market downturns and the potential for higher returns over the investment horizon. In addition, the company’s anticipated growth in the coming years can potentially lead to a doubling of returns within the investment period.

Should you invest $1,000 in Restaurant Brands International right now?

Before you buy stock in Restaurant Brands International, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Restaurant Brands International wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 Chris MacDonald has positions in Restaurant Brands International. The Motley Fool recommends Restaurant Brands International. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Investing

money goes up and down in balance
Retirement

Where I’d Invest $10,000 in Canadian Value Stocks for Long-term Growth

Suncor Energy Inc (TSX:SU) is a quality Canadian value stock.

Read more »

A worker gives a business presentation.
Dividend Stocks

Market Dip: Opportunity or Risk This April?

This market dip might have investors worried, but should they be excited instead?

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Why I’d Add This Top TSX Dividend Stock to My TFSA During the Current Dip

The market is full of volatility right now. Fortunately, this top TSX dividend trades at a discount and pays a…

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Invest $20,000 in 2 TSX Stocks for $1,421.09 in Passive Income

Are you looking to bump up your passive income? Then consider these two TSX stocks.

Read more »

Investor wonders if it's safe to buy stocks now
Energy Stocks

Billionaires Might Sell U.S. Stocks and Buy This Canadian Stock to Avoid Tariff Risks

Billionaires might be worried about the future of U.S. stocks with the markets the way they are, and looking for…

Read more »

A plant grows from coins.
Dividend Stocks

Where I’d Invest in Canadian Value Stocks for Long-Term Compounding

When markets plunge, Warren Buffett's wisdom shines: Get greedy when others are fearful. Canadian value stocks like Scotiabank await patient…

Read more »

Paper Canadian currency of various denominations
Stocks for Beginners

2 Canadian Value Stocks for 2025

There's a fair bit to consider when looking at value stocks, so let's look at two that fit the bill.

Read more »

woman looks at iPhone
Investing

BCE vs. Rogers Communications: How I’d Divide $10,000 Between Telecom Leaders

BCE (TSX:BCE) and Rogers Communications (TSX:RCI.B) have been hit way too hard in recent years.

Read more »