Where Will Restaurant Brands International Stock Be in 1/3/5 years?

Here’s why I think Restaurant Brands (TSX:QSR) remains a top option for long-term investors to consider right now.

| More on:
a man celebrates his good fortune with a disco ball and confetti

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

The Canadian equity markets continue to remain volatile as investors navigate the challenging macroeconomic backdrop. While inflation has eased somewhat, elevated interest rates are slowing consumer spending, making many companies appear to be fairly valued (at least) in this current environment.

With that said, there are some value stocks I do think are worth considering right now. One is Restaurant Brands (TSX:QSR), a company I’ve been pounding the table on for quite some time.

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

Let’s dive into what to make of this company’s recent moves, and where Restaurant Brands could be headed from here.

Where Restaurant Brands has come from

Over the past five years, Restaurant Brands’ stock chart has looked relatively stable (see above). This stock is up meaningfully over this timeframe, but it’s also true that plenty of other stocks in this market have outperformed the fast food giant.

There are a number of reasons for this, including Restaurant Brands’ previous pricey multiple and its growth expectations relative to the numbers the company actually delivered. The thing is, Restaurant Brands’ model of collecting revenue via its network of franchised stores (taking royalty fees) and operating company-owned restaurant locations has provided stable and consistent growth over time.

Many experts believe this growth is likely to continue for some time, as the company continues to expand globally and focus on higher-growth markets around the world. I think this is an important aspect to consider, and is one that should drive future earnings growth over time.

How has growth looked recently?

On the fundamentals front, I think there’s a lot to like about how Restaurant Brands is positioned right now. The stock’s current multiple of 17 times earnings is reasonable and suggests the market believes this fast food giant will deliver market-weighted returns, at least over the medium term.

The company’s Q2 results painted a picture of strong growth, but nothing to really write home about. Thus, this multiple may make sense. Overall system-wide sales growth of 5% is decent, but it’s not going to get growth investors off the sidelines and into this name.

That said, on the bottom line, the company’s 14.3% EPS growth is something I think value investors are paying closer attention to. Restaurant Brands brought in $0.88 of earnings per share this past quarter compared to $0.77 the same quarter the year prior. Operating income also grew 9%, suggesting growth may be more robust beneath the surface, as the company continues to make its operations more efficient and focus on profitability.

Restaurant Brands remains a buy

In my view, there are few better defensive options to consider in this market. Folks need to eat, and those choosing to eat outside their home may look for lower-priced options if times do get tough. However, if we do see a continuation of this bull market, companies like Restaurant Brands could perform as well as the market. That’s a bet I think equities investors can make right now.

Over the next 1–5 years, I expect Restaurant Brands to perform at least as well as the overall TSX. And in the case we do get a recession, this is a stock that can vastly outperform its peers – that’s why this is a stock I’d hold for the long term, and start accumulating on any significant weakness moving forward.

Should you invest $1,000 in Cargojet right now?

Before you buy stock in Cargojet, 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 Cargojet 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 Dividend Stocks

analyze data
Dividend Stocks

How I’d Invest $28,000 in Canadian Natural Resource Stock to Amass Personal Wealth

Investing in TSX dividend stocks such as Enbridge can help you earn a passive-income stream in 2025.

Read more »

hand stacks coins
Dividend Stocks

Got $400? How I’d Start Building Income With 3 High-Yield Stocks for the Long Term

These high-yield dividend stocks have a solid payout history, making them compelling investments to generate passive income.

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

I’d Put $15,000 in These 3 Dividend-Growth Champions for Increasing Income Potential

Want to offset some volatility? Here are three defensive dividend-growth champions that can generate a juicy yield right now.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Transform Your TFSA Into a Cash-Creating Machine With $7,000

Discover how the Tax-Free Savings Account can be your golden goose for generating cash without losing your investment.

Read more »

monthly desk calendar
Dividend Stocks

How I’d Invest $10,000 in Canadian Value Stocks for Monthly Dividend Income

A $10,000-diversified portfolio of value stocks focusing on dividend safety, yield, growth, and payment schedules can provide a reliable source…

Read more »

a person watches a downward arrow crash through the floor
Dividend Stocks

Is This Correction Your Chance? Top 4 Canadian Dividend Stocks on Sale

Stocks may be down, but now is your chance to get some of these top dividend stocks on sale.

Read more »

Confused person shrugging
Dividend Stocks

Where to Invest $2,500 in the TSX Today

These TSX stocks offer attractive dividends and a shot at decent upside on a rebound.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Invest $25,000 in These Dividend Stocks for $1,956.66 in Annual Passive Income

Dividends stocks can make a huge difference, even if shares don't move an inch. And these might be the best.

Read more »