If you’re hunting for a rock-solid, long-term hold on the TSX, Restaurant Brands (TSX:QSR) stands out like a Whopper in a sea of sliders.
This powerhouse parent of iconic brands delivers predictable growth, juicy dividends, and resilience that screams “buy and forget.”
I thought it would be interesting to dive into each of the company’s core business segments, to provide my bull case on Restaurant Brands moving forward. So, let’s do that!
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Tim Hortons
Tim Hortons remains Canada’s coffee kingpin, and perhaps most recognizable brand. Founded by the famous former Toronto Maple Leaf, Tim Hortons has not only been fueling up Canadians for decades. This is a company that’s fueling strong earnings and growth for its parent company, rewarding investors who want a piece of the more than 5,000 locations across North America and abroad.
Indeed, the bulk of Restaurant Brands’s growth continues to come from Tim Hortons, which is seeing strong upside in global markets. Hundreds of new stores are expected to be opened through 2028, with this growth strategy poised to pay off nicely. That’s thanks to a franchised model that’s got very high margins, with devoted franchisees (many of which with more than one location).
With system-wide sales growth of around 8%, and comparable same-store sales around 3%, this is a business with a sticky consumer that’s worth investing in.
Burger King
The flame-grilled giant, Burger King boasts 19,000 worldwide locations, and the company’s management team is looking to claw back market share with remodels and value meals that crush competitors on price.
International markets, especially Asia, are exploding. Indeed, Burger King has seen more than 5% net restaurant growth planned, fueled by royalty hikes as franchises scale. Despite U.S. traffic hiccups, its asset-light setup generated $2.5 billion in operating income last year.
I think that as trade-down continues to become a bigger story in the world of restaurants, and Burger King’s value offerings are taken to heart by consumers in greater numbers, this is a business which could take off in the years to come.
Popeyes
Popeyes is Restaurant Brands’s growth rocket, with its spicy chicken sandwich sparking +10% U.S. comps and rapid builds. This banner is now aiming to become half of RBI’s 1,800 annual net adds by 2028, alongside Firehouse Subs.
This U.S.-centric powerhouse lifted overall sales 8.1% last year, turning heads with $544 million in operating income. That’s a sharp and notable increase, and one I (and other investors) will want to see continue over time. That said, with strong franchise momentum and solid operating leverage, I think Popeyes will continue to provide a big boost to Restaurant Brands’s bottom line for years and decades to come.
