The Smartest Growth Stock to Buy With $1,000 Right Now

Restaurant Brands International (TSX:QSR) stock is a great dividend (growth) play to consider while it’s still relatively undervalued.

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If you’re a younger investor who’s more than a decade away from retirement, I’d argue it still makes sense to go for growth. Indeed, high-tech growth plays surrounding the generative artificial intelligence (AI) trend have been bid up for yet another year.

And while valuations seem extended, making some stocks ripe for profit-taking before year’s end, I’d argue that there are still relatively low-cost growth stocks that still have what it takes to surge higher, even if the AI trade were to go bust tomorrow, dragging down the tech sector or maybe even the rest of the market.

Indeed, some of the non-AI growth plays still make sense to own in this environment. Arguably, some of the names are trading at multiples below their recent historical averages, making them intriguing contrarian ways to grow your wealth without having to join the rest of the herd in some of the market’s most crowded trades.

Though there are a handful of TSX names with strong growth trajectories worth picking up as the TSX Index caps off an incredibly impressive year, I think one name stands out as having what it takes to rally without as much help from the rest of the market.

Restaurant Brands International stock: A dividend bargain with the means to really grow!

Consider shares of Restaurant Brands International (TSX:QSR), a fast-food giant that looks very well-equipped to thrive as the quick-serve restaurant firms look to double down on value in a bid to win back the business of diners.

The company behind Burger King, Tim Hortons, Popeyes Louisiana Kitchen, and Firehouse Subs has done a better job than most rivals at moving through inflation. Still, the firm may need to do a bit more to beckon restaurantgoers back in the new year, as some big names in the industry look to extend their best value offerings.

In the latest quarter, Restaurant Brands reported some pretty underwhelming third-quarter results. As the industry gets more competitive in pricing, Restaurant Brands needs to communicate the value to be had at its chains. At 17.5 times trailing price to earnings (P/E), QSR stock stands out as a relative bargain that’s hiding in plain sight.

With four legendary brands and an intact growth profile that can progress, regardless of the economic environment, I’d argue a much higher multiple is deserved. The 3.3% dividend yield is also enticing to new investors who want to get paid handsomely while they wait for the firm to execute its long-term plan.

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The long-term plan looks impressive

Over the longer term, perhaps investments in tech and automation could help Restaurant Brands pad its margins or pass more value to customers. Indeed, the company has been investing heavily in bringing some locations into the modern age.

With improving mobile apps and other initiatives that could streamline things behind the scenes, I’d not sleep on the name as it attempts to catch up to the leaders in the space. Though such efforts won’t pay off overnight, I think they’ll help enable Restaurant Brands to take some market share over the next several years.

For now, expanding the value lineup is a top priority. Just because inflation is normalized doesn’t mean consumers will be any more willing to get used to the price increases that have weighed heavily over the past few years. On the pricing front, I think QSR is on the right track.

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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 Joey Frenette has positions in Restaurant Brands International. The Motley Fool recommends Restaurant Brands International. The Motley Fool has a disclosure policy.

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