1 Stock I’m Buying Hand Over Fist in October Despite the Market’s Pessimism 

Here’s why Restaurant Brands (TSX:QSR) remains among my top picks for long-term investors to consider in this current market.

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There’s been some growing pessimism pervading the overall market in recent months, as investors factor in a range of potential market headwinds into their analysis. From a slowing job market to cracks in the consumer and inflation numbers now dropping below target, it’s unclear whether we’re going to go from a monetary policy stance that’s too tight to one that may be much more accommodative, and if that’s for the right reasons.

That said, investing is generally a long-term game. I think it’s more important to focus on finding the best companies in any environment and sticking with such growth stocks until either the thesis changes or one hits their savings target and looks to pull capital out in retirement.

Here’s my top pick in this current market.

About Restaurant Brands

Restaurant Brands (TSX:QSR) is among the world’s largest quick-service restaurant companies. The company is well known as the holding company for four iconic and internationally acclaimed fast food franchises, namely Burger King, Popeyes, Tim Hortons, and Firehouse Subs. With more than 30,000 restaurants across 120 countries, RBI has a broad geographic presence and a diverse customer base.

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The company’s activities involve owning, operating, and supporting a fast network of fast food restaurants. Most of the brands under RBI work independently as franchisees with their own core values and communities. The company’s revenue comes primarily from franchise royalties, property revenues, and various supply chain products. 

Where this growth comes from

Over the years, Restaurant Brands International has carried out a slew of actions for each of its brands to fuel growth.

To develop a stronger market presence, Restaurant Brands made several strategic acquisitions in 2024. In May, the company completed its acquisition of the Carrols Restaurant Group, the largest Burger King franchisee in the US, for around $1 billion. Now, the company plans to invest $500 million to reimage and improve 600 Carrols restaurants across the US.

Additionally, Restaurant Brands International has announced the acquisition of Popeyes China, which it will operate on its own. Furthermore, RBI has partnered with Cartesian Capital to acquire TH International Limited or Tims China. These acquisitions will enable RBI to leverage growing opportunities in one of the largest QSR markets. 

Restaurant Brands International is determined to improve the status and profitability of its outlets. That is why the holding company is investing in everything from menu changes to remodelling of stores to drive growth. For its Burger King franchisees, RBI has funded $85 million in the ‘Fuel the Flame’ initiative to carry out high-quality remodels, technology upgrades, and building renovations.

RBI is already witnessing the results of its improvements with strong financial performance. For the second quarter of 2024, Restaurant Brands International has demonstrated a 1.9% increase in consolidated comparable sales. System-wide sales for RBI have improved for Tim Hortons, Popeyes Louisiana Kitchen, and the international segment with 4.6%, 0.5%, and 2.6% growth, respectively.

Bottom line

With the recent drop seen in QSR stock, investors get the unique opportunity to invest at slightly lowered prices. The company’s fundamentals have improved in 2024, driven by multiple strategic acquisitions, strengthening of core offerings, and enhanced operations. This makes Restaurant Brands International a top pick on the TSX.  

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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.

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