Valued at a market cap of US$22.5 billion, Restaurant Brands (TSX:QSR) operates quick-service restaurant chains globally through six segments. The company owns and operates brands including Tim Hortons (coffee and baked goods), Burger King (flame-grilled hamburgers), Popeyes Louisiana Kitchen (chicken), and Firehouse Subs (submarine sandwiches).
The TSX stock went public in late 2014 and has since returned 223% to shareholders in dividend-adjusted gains. Down almost 14% from all-time highs, QSR stock offers shareholders a tasty dividend yield of 3.4%.
Let’s see if this TSX dividend stock can continue to outpace the broader markets in the next five years.
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Is Restaurant Brands stock a good buy?
Restaurant Brands International delivered a relatively flat performance in the first quarter (Q1) of 2025, with consolidated comparable sales of 0.1% (approximately 1% after adjusting for the Leap Day impact) and net restaurant growth of 3.3%. This translated to system-wide sales growth of 2.8% and organic adjusted operating income growth of 2.6%.
Management acknowledged Q1 as their softest quarter, citing macroeconomic challenges across key markets. Despite this, CEO Josh Kobza expressed confidence in delivering at least 8% organic adjusted operating income growth for 2025, supported by improving sales momentum observed in April and continued cost discipline.
Tim Hortons Canada posted flat comparable sales of 0.1%, though management emphasized the underlying strength of the business when accounting for tough prior-year comparisons and the impact of Leap Day.
The brand continues to focus on operational excellence, with morning drive-through times improving for nine consecutive quarters. Development efforts in Canada are accelerating, particularly in underpenetrated Western regions.
The International segment showed resilience with 2.6% comparable sales growth (3.7% excluding Leap Day) and 8.6% system-wide sales growth, driven by solid performance in the U.K., Germany, Brazil, Japan, and Australia.
In China, following the February acquisition of the remaining equity interest in Burger King China, management is working to reposition the business for long-term success while actively seeking a new local partner.
Burger King U.S. experienced a 1.1% decrease in comparable sales but continued to outperform the broader burger QSR (quick service restaurant) category. The brand remains focused on restaurant modernization, with approximately 400 remodels planned for 2025, and it targets over 85% modern-image restaurants by 2028.
Popeyes U.S. and Canada comparable sales declined 4%. However, management outlined their “Easy to Love” strategy to improve operational consistency and restaurant aesthetics, supported by increased national advertising spending beginning in April.
CFO Sami Siddiqui announced lower general and administrative guidance for 2025, now expected between US$600 million and US$620 million (excluding Restaurant Holdings), down from the previously estimated US$650 million and US$670 million. This reinforces the company’s focus on driving operating leverage while continuing to invest in strategic growth initiatives.
What is the target price for the TSX stock?
Analysts expect Restaurant Brands’ revenue to increase from US$8.41 billion in 2024 to US$9.85 billion in 2029, indicating an annual growth rate of 3.2%. Comparatively, adjusted earnings per share are forecast to expand from US$3.34 in 2024 to US$5.07 in 2029, growing by almost 6% annually.
In the last five years, QSR’s sales grew by 8.5%, while earnings growth was much lower, 4.2%. Today, the TSX stock trades at a trailing price-to-earnings multiple of 23.4 times, below its 10-year average of 25.8 times.
If QSR stock is priced at 23 times trailing earnings, it will trade around US$135 in May 2030, indicating an upside potential of almost 100%. Analysts also expect the dividend per share to increase from US$1.30 in 2019 to US$2.18, indicating an annual growth rate of almost 11%.
