When looking for a standout stock to invest in for 2025, Restaurant Brands International (TSX:QSR) is a true behemoth in the world of quick-service restaurant companies. The parent of Tim Hortons, Popeyes, Burger King, and a range of other world-class banners has continued to grow over the years, though the company’s growth rate has slowed significantly, and investors have grown increasingly cautious with this name.
There are certainly reasons for this view. Fast food has become less affordable due to inflation, and there are concerns that the population as a whole will consume less of the company’s offerings as GLP-1 drugs continue to gain market prevalence.
Here’s why I still think Restaurant Brands is a defensive stock that’s worth a look from investors right now.
Source: Getty Images
Consumers are increasingly value-focused
One of the key differentiating factors I think investors within any sector need to focus on right now is the value proposition specific companies provide relative to the overall market. In the case of Restaurant Brands, this is a company with a clearly defined value offering that consumers are more likely to move toward as their budgets continue to tighten.
Whether these trends will be due to continued inflation or increased household debt loads, I think that most consumers looking to eat away from home will choose to do so in the most cost-effective way, at least over the next few years. At the same time, these consumers are likely to choose restaurants that have banners they associate with quality. I’d argue that Restaurant Brands’s portfolio of companies is among the best in its sector.
Thus, for those who believe these trends will continue in this direction, this is a stock to consider.
Financials should improve
Using this logic, Restaurant Brands’s focus on returning to growth should bring about stellar returns if the company is able to indeed translate increased demand over time (and new store openings in high-growth markets around the world) into earnings.
I think this will be the case as the company continues to revitalize its brands and bring additional menu innovation forward. In the past few quarters, growth has been somewhat anemic for shareholders. However, as the company improves its operational efficiency and continues to raise its dividend, I think this company will become a top dividend stock investors look to for defensive equity exposure right now.
Can 2025 be Restaurant Brands’s year?
Restaurant Brands is certainly a company I think is worth a core portfolio position right now. While the market may not necessarily appreciate the company’s growth prospects (and there are reasons for this), I think there’s strong value in this company’s shares. Trading at 15 times earnings with a 3.8% dividend yield, there are few better places to allocate capital right now, in my view.
