Finding the best Canadian stocks to put capital to work in for the long term is a task that many investors are pursuing. I’d argue that Canadian stocks have garnered a global cachet of late, thanks to the reality that the TSX is a market chock full of commodities and financials stocks, which could benefit in an increasingly uncertain world.
That said, there’s one particular name I’ve been pounding the table on of late that looks cheaper than it has in some time. Restaurant Brands (TSX:QSR) is a leading fast food provider that I think provides the right mix of growth, dividend yield, and long-term capital appreciation upside that investors are after.
Here’s why this is the key stock I think investors want to consider putting their next $20,000 to work in right now.
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Fundamentals shine bright
In terms of Restaurant Brands’ recent results, there’s plenty of upside for investors to consider.
This past quarter, the company crushed its Q4 expectations. Restaurant Brands posted consolidated system-wide sales growth of 5.8% to $12.1 billion, with full-year growth coming in at 5.3%. Importantly, comparable sales rose 3.1% in the quarter, powered by a stellar 6.1% at Popeyes. That drove organic adjusted operating income, surging 15.6%, well ahead of the company’s 8% target.
With revenues hitting $2.5 billion in Q4 (up 7.4%), adjusted EBITDA climbing to $772 million, and adjusted EPS reaching $0.96 (up from $0.81 year-over-year), there’s a lot to like about how Restaurant Brands is performing here. Even with some foreign exchange headwinds, net leverage sits comfortably at 4.2 times, underscoring financial discipline amid fast-food turbulence.
I think there are few more defensive stocks in the market with such a robust balance sheet and forward growth prospects trading at a valuation of just 13 times forward earnings. Indeed, for those looking to maximize the “bang for their buck” right now, QSR stock looks like a solid pick.
Long-term growth appears to be locked in
Again, I view Restaurant Brands as a true “growth at a reasonable price” play right now. The company’s fundamentals point to strong forward growth, with the growth algorithm suggesting around 5% net restaurant growth over time. This should amount to around 1,800 new units per year through 2028. Thus, for those bullish on the Tim Hortons U.S. push, Popeyes drive-thrus, and Firehouse Subs builds in North America, this is something to pay attention to. These will likely amount to roughly half the new builds, with impressive upside from the company’s global expansion plans of around 700 units/year coming from India, UK, Mexico, France, Japan, plus 200-plus in China.
Menu innovations and revamps, such as the one we saw with Burger King’s revamped Whopper (new bun, mayo, packaging) is sparking increased traffic. That’s to say nothing of Tim Hortons’ afternoon eats and 50% digital sales goal by 2028.
With the company’s management team resuming $500 million buybacks in 2026, hiking dividends to a 60% payout ratio and simplifying operations for maximum efficiency, this is a stock with some long-duration tailwinds I think is worth buying right now.
