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Also traded in: Canada, Germany, Mexico

GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 4/10

vs
industry
vs
history
Cash-to-Debt 0.10
QSR's Cash-to-Debt is ranked lower than
84% of the 334 Companies
in the Global Restaurants industry.

( Industry Median: 0.68 vs. QSR: 0.10 )
Ranked among companies with meaningful Cash-to-Debt only.
QSR' s Cash-to-Debt Range Over the Past 10 Years
Min: 0.07  Med: 0.11 Max: 0.31
Current: 0.1
0.07
0.31
Equity-to-Asset 0.10
QSR's Equity-to-Asset is ranked lower than
92% of the 331 Companies
in the Global Restaurants industry.

( Industry Median: 0.50 vs. QSR: 0.10 )
Ranked among companies with meaningful Equity-to-Asset only.
QSR' s Equity-to-Asset Range Over the Past 10 Years
Min: 0.1  Med: 0.25 Max: 0.26
Current: 0.1
0.1
0.26
Debt-to-Equity 5.53
QSR's Debt-to-Equity is ranked lower than
99% of the 249 Companies
in the Global Restaurants industry.

( Industry Median: 0.50 vs. QSR: 5.53 )
Ranked among companies with meaningful Debt-to-Equity only.
QSR' s Debt-to-Equity Range Over the Past 10 Years
Min: 1.74  Med: 1.95 Max: 5.83
Current: 5.53
1.74
5.83
Debt-to-EBITDA 5.96
QSR's Debt-to-EBITDA is ranked lower than
85% of the 234 Companies
in the Global Restaurants industry.

( Industry Median: 2.32 vs. QSR: 5.96 )
Ranked among companies with meaningful Debt-to-EBITDA only.
QSR' s Debt-to-EBITDA Range Over the Past 10 Years
Min: 4.84  Med: 6.69 Max: 117.91
Current: 5.96
4.84
117.91
Interest Coverage 3.61
QSR's Interest Coverage is ranked lower than
85% of the 278 Companies
in the Global Restaurants industry.

( Industry Median: 23.62 vs. QSR: 3.61 )
Ranked among companies with meaningful Interest Coverage only.
QSR' s Interest Coverage Range Over the Past 10 Years
Min: 2.33  Med: 3.1 Max: 3.85
Current: 3.61
2.33
3.85
Piotroski F-Score: 5
Altman Z-Score: 1.11
Beneish M-Score: -2.73
WACC vs ROIC
7.27%
13.49%
WACC
ROIC
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 8/10

vs
industry
vs
history
Operating Margin % 36.98
QSR's Operating Margin % is ranked higher than
95% of the 333 Companies
in the Global Restaurants industry.

( Industry Median: 5.08 vs. QSR: 36.98 )
Ranked among companies with meaningful Operating Margin % only.
QSR' s Operating Margin % Range Over the Past 10 Years
Min: 26.18  Med: 40.06 Max: 52.73
Current: 36.98
26.18
52.73
Net Margin % 12.74
QSR's Net Margin % is ranked higher than
90% of the 333 Companies
in the Global Restaurants industry.

( Industry Median: 2.80 vs. QSR: 12.74 )
Ranked among companies with meaningful Net Margin % only.
QSR' s Net Margin % Range Over the Past 10 Years
Min: 5.97  Med: 13.82 Max: 20.39
Current: 12.74
5.97
20.39
ROE % 30.65
QSR's ROE % is ranked higher than
94% of the 314 Companies
in the Global Restaurants industry.

( Industry Median: 6.81 vs. QSR: 30.65 )
Ranked among companies with meaningful ROE % only.
QSR' s ROE % Range Over the Past 10 Years
Min: -12.13  Med: 7.08 Max: 30.83
Current: 30.65
-12.13
30.83
ROA % 3.12
QSR's ROA % is ranked lower than
54% of the 334 Companies
in the Global Restaurants industry.

( Industry Median: 3.60 vs. QSR: 3.12 )
Ranked among companies with meaningful ROA % only.
QSR' s ROA % Range Over the Past 10 Years
Min: 1.21  Med: 3.15 Max: 8.02
Current: 3.12
1.21
8.02
ROC (Joel Greenblatt) % 89.76
QSR's ROC (Joel Greenblatt) % is ranked higher than
87% of the 332 Companies
in the Global Restaurants industry.

( Industry Median: 15.69 vs. QSR: 89.76 )
Ranked among companies with meaningful ROC (Joel Greenblatt) % only.
QSR' s ROC (Joel Greenblatt) % Range Over the Past 10 Years
Min: 1.09  Med: 75.13 Max: 122.78
Current: 89.76
1.09
122.78
3-Year Revenue Growth Rate 46.90
QSR's 3-Year Revenue Growth Rate is ranked higher than
98% of the 282 Companies
in the Global Restaurants industry.

( Industry Median: 4.10 vs. QSR: 46.90 )
Ranked among companies with meaningful 3-Year Revenue Growth Rate only.
QSR' s 3-Year Revenue Growth Rate Range Over the Past 10 Years
Min: 6.5  Med: 24.9 Max: 46.9
Current: 46.9
6.5
46.9
3-Year EBITDA Growth Rate 158.20
QSR's 3-Year EBITDA Growth Rate is ranked higher than
99% of the 258 Companies
in the Global Restaurants industry.

( Industry Median: 5.60 vs. QSR: 158.20 )
Ranked among companies with meaningful 3-Year EBITDA Growth Rate only.
QSR' s 3-Year EBITDA Growth Rate Range Over the Past 10 Years
Min: 16.6  Med: 18.9 Max: 158.2
Current: 158.2
16.6
158.2
GuruFocus has detected 1 Warning Sign with Restaurant Brands International Inc QSR.
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» QSR's 30-Y Financials

Financials (Next Earnings Date: 2019-02-13 Est.)


Revenue & Net Income
Cash & Debt
Operating Cash Flow & Free Cash Flow
Operating Cash Flow & Net Income

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Guru Trades

Q4 2017

QSR Guru Trades in Q4 2017

PRIMECAP Management 215,000 sh (New)
Lee Ainslie 61,949 sh (New)
Paul Tudor Jones 8,114 sh (New)
Pioneer Investments 72,080 sh (New)
Joel Greenblatt 57,737 sh (+1472.79%)
Murray Stahl 16,749 sh (+2.83%)
Jim Simons 101,800 sh (+278.44%)
Caxton Associates 150,000 sh (+275.00%)
Louis Moore Bacon 350,000 sh (+100.00%)
Warren Buffett 8,438,225 sh (unchged)
Bill Ackman 26,500,729 sh (unchged)
Chase Coleman 1,900,000 sh (-24.00%)
Steven Cohen 138,800 sh (-88.96%)
Ray Dalio 30,068 sh (-38.86%)
» More
Q1 2018

QSR Guru Trades in Q1 2018

Joel Greenblatt 71,245 sh (+23.40%)
PRIMECAP Management 859,200 sh (+299.63%)
Paul Tudor Jones 43,200 sh (+432.41%)
Jim Simons 331,387 sh (+225.53%)
Caxton Associates 285,000 sh (+90.00%)
Warren Buffett 8,438,225 sh (unchged)
Chase Coleman 1,900,000 sh (unchged)
Caxton Associates 250,000 sh (unchged)
Lee Ainslie Sold Out
Louis Moore Bacon Sold Out
Bill Ackman 24,320,295 sh (-8.23%)
Murray Stahl 13,784 sh (-17.70%)
Steven Cohen 36,200 sh (-73.92%)
Pioneer Investments 71,256 sh (-1.14%)
Ray Dalio 29,444 sh (-2.08%)
» More
Q2 2018

QSR Guru Trades in Q2 2018

Louis Moore Bacon 250,000 sh (New)
PRIMECAP Management 964,800 sh (+12.29%)
Steven Cohen 1,379,907 sh (+3711.90%)
Pioneer Investments 77,487 sh (+8.74%)
Ray Dalio 100,224 sh (+240.39%)
Warren Buffett 8,438,225 sh (unchged)
Chase Coleman 1,900,000 sh (unchged)
Caxton Associates 100,000 sh (unchged)
Joel Greenblatt Sold Out
Jim Simons Sold Out
Bill Ackman 20,843,919 sh (-14.29%)
Murray Stahl 13,308 sh (-3.45%)
Paul Tudor Jones 42,437 sh (-1.77%)
Caxton Associates 275,000 sh (-3.51%)
» More
Q3 2018

QSR Guru Trades in Q3 2018

Jim Simons 84,800 sh (New)
Lee Ainslie 5,250 sh (New)
Joel Greenblatt 48,348 sh (New)
PRIMECAP Management 1,034,400 sh (+7.21%)
Ray Dalio 117,089 sh (+16.83%)
Pioneer Investments 118,115 sh (+52.43%)
Pioneer Investments 72,400 sh (unchged)
Chase Coleman 1,900,000 sh (unchged)
Warren Buffett 8,438,225 sh (unchged)
Bill Ackman 20,843,919 sh (unchged)
Caxton Associates 225,000 sh (unchged)
Louis Moore Bacon Sold Out
Paul Tudor Jones Sold Out
Murray Stahl 13,090 sh (-1.64%)
Steven Cohen 77,900 sh (-94.35%)
Caxton Associates 250,000 sh (-9.09%)
» More
» Details

Insider Trades

Latest Guru Trades with QSR

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Business Description

Industry: Restaurants » Restaurants    NAICS: 722511    SIC: 9211
Compare:TSX:QSP.UN, NYSE:YUMC, NYSE:DRI, NYSE:DPZ, NYSE:ARMK, LSE:WTB, NYSE:CMG, PHS:JFC, TSE:2702, BKK:MINT-F, NAS:DNKN, LSE:SSPG, NAS:WEN, NAS:TXRH, NAS:CBRL, MIL:AGL, TSE:7550, MEX:ALSEA, ASX:DMP, TSE:3197 » details
Traded in other countries:QSR.Canada, 0R6.Germany, QSR N.Mexico,
Headquarter Location:Canada
Restaurant Brands International Inc is a quick service restaurant company. It owns and operates restaurants brands include Burger King, Tim Hortons, and Popeyes Louisiana Kitchen.

The consolidation of Burger King, Tim Hortons, and Popeyes Louisiana Kitchen as Restaurant Brands International creates the third-largest global quick-service restaurant chain, with $30.5 billion in pro forma system sales in 2017 and 24,400 units (99% franchised) as of December 2017. Revenue comes largely from franchise royalties and distribution sales to franchisees. Worldwide, there are 16,800 Burger King locations, 4,700 Tim Hortons locations, and 2,900 Popeyes locations.

Guru Investment Theses on Restaurant Brands International Inc

Bill Ackman Comments on Restaurant Brands International - Nov 15, 2018

QSR (NYSE:QSR)’s total shareholder return declined 1% during the third quarter and by 7% year to date. Despite the stock’s performance, overall results remain strong, as free cash flow per share growth has increased more than 30% this year due to a combination of positive same-store stores growth, strong net unit growth and a substantial benefit from last year’s refinancing of high-cost preferred stock. We attribute the weakness in the company’s share price to investor concerns regarding the ongoing slowdown in same-store sales at Tim Hortons, which were flat in 2017 and have not yet shown a meaningful improvement in 2018.

We remain confident that QSR can return Tim Hortons to a healthy level of same-store sales growth over time. Earlier this year, QSR replaced the prior management at Tim Hortons with the same team that had previously improved same-store sales results at Burger King several years ago. The company also announced a new operational plan, entitled “Winning Together,” which incorporates a variety of initiatives including menu innovation, enhanced marketing, store re-imaging, and investments in digital technology. While Tim Hortons’ management has just started to implement some of these new initiatives, same-store sales growth this quarter improved from the first two quarters of this year. We expect continued improvement as the new management team implements more of the recently announced initiatives.

While the market is focused on near-term same-store sales results at Tim Hortons (to an excessive extent in our view), we believe it is overlooking the sizeable long-term unit growth opportunity at each of QSR’s brands:


  • Burger King’s fast growing international business is still much smaller than competitor McDonald’s, which has more than three times the numbers of international stores.




  • Tim Hortons’ U.S. business is a fraction of the size of Dunkin’s, which has almost ten times the number of U.S. stores. In addition, Tim Hortons is beginning to expand internationally, including a recent franchise agreement to add 1,500 stores in China (~30% of the current store count), which we believe highlights the power of the brand’s overseas potential.




  • Popeyes has a small store count compared to KFC, which has close to eight times the number of total stores.



Moreover, QSR’s deep network of global franchisee partners who have successfully opened stores under one of the company’s brands provides an advantage in accelerating unit growth for other brands in QSR’s portfolio. The company’s ability to continue to close the current store count gap with each of its brand’s closest peers should allow it to maintain its current 6% net unit growth rate for many years to come. We believe that QSR’s unit-growth potential underpins a long-term earnings growth rate in the mid-teens, and should allow the company to maintain strong earnings growth even during a period of weaker same-store sales results.

Despite the high-quality nature of QSR’s capital -light business model and its significant long-term growth potential, the company’s shares trade at only 19 times our estimate of next year’s free cash flow per share. The current multiple is one of the lowest since our initial investment in the company and is significantly below that of its capital-light peers, such as McDonald’s, Yum! and Dunkin, which have lower unit-growth potential and trade at an average of 24 times analyst estimates of next year’s free cash flow per share. As QSR continues to make progress on same-store sales growth at Tim Hortons and maintains its high level of unit growth, we believe the company’s share price will appreciate significantly from current levels. Management appears to share our view of the company’s undervaluation as the company recently repurchased $560 million of common stock.

From Bill Ackman (Trades, Portfolio)'s third-quarter 2018 Pershing Square shareholder letter.

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Bill Ackman Comments on Restaurant Brands International - Aug 10, 2018

Restaurant Brands International Inc. (NYSE:QSR)

Restaurant Brands’ second quarter results showed continued earnings growth as performance at Burger King and Popeyes remained strong, offset somewhat by muted results at Tim Hortons. QSR reported strong unit growth of 6%, as Burger King units increased 6%, Popeyes 7% and Tim Hortons 3%. QSR announced a master franchise agreement to open 1,500 Tim Hortons restaurants in China over the next decade (30% of current Tim’s units), which should accelerate the brand’s long-term unit growth. Same-store sales this quarter grew 2% at Burger King due to strength in promotional offers and product innovation. Popeyes’ same-store sales grew 3% as the brand is experiencing the benefits of a more value-focused menu. Tim Hortons’ same-store sales were flat as growth in breakfast foods and cold beverages was offset by weakness in baked goods and brewed coffee.

QSR is working on a variety of initiatives that should improve same-store sales at Tim Hortons. Recently, the brand launched all-day breakfast. The company’s consumer surveys suggest this could have a meaningful impact on sales as 60% of guests said they would likely buy a breakfast sandwich after 12pm, and one-third said they would likely increase the frequency of their visits. Tim Hortons is also developing a kids’ menu and a loyalty program which management expects to introduce within the next few quarters.

Organic EBITDA grew 4%, as Burger King’s grew 6%, Popeyes’ grew 28%, and Tim Hortons’ declined 1%. Growth at Burger King continues to reflect progress in strong same-store sales, net unit growth and margin enhancement. Popeyes’ growth primarily reflects improved cost efficiencies. The decline at Tim Hortons resulted from lapping the prior year’s sales of new equipment related to the launch of the espresso-based drinks platform, which will no longer be a headwind in future quarters. Overall, QSR’s reported EBITDA grew 6% due to organic growth and a 2% benefit from a weaker USD. EPS grew more than 30% due primarily to the lower financing costs associated with the repayment of the Berkshire preferred stock at the end of last year.

From Bill Ackman (Trades, Portfolio)'s second quarter 2018 Pershing Square shareholder letter.

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Bill Ackman Comments on Restaurant Brands International - May 17, 2018

Restaurant Brands International Inc. (NYSE:QSR)

Restaurant Brands’ first quarter results showed continuing earnings growth as Burger King and Popeyes delivered strong results, partially offset by weaker results at Tim Hortons. QSR reported strong unit growth of 6% as Burger King and Popeyes net unit count increased 7%, and Tim Hortons net unit count increased 3%. Same-store sales grew 4% at Burger King as the concept continues to strike the right balance between value offerings and limited-time premium products. Popeyes’ same-store sales grew 3% as the company achieved its goal of introducing more value items on the menu. Tim Hortons’ same-store-sales were down slightly as sales growth in breakfast foods was more than offset by heightened competition in coffee.

To improve results at Tim Hortons, QSR unveiled a new initiative called “Winning Together,” which will focus on improving the restaurant experience, product excellence, and brand communications. As part of the plan, the company will partner with Tim Hortons’ franchisees to reimage a large portion of its store

base, increase its focus on digital technology, expand and improve its menu offerings, and launch more brand-enhancing marketing campaigns. QSR recently appointed a new President and Chief Marketing Officer at Tim Horton’s, who previously played important roles in reigniting Burger King’s U.S. sales growth.

QSR’s organic EBITDA grew 5% as Burger King EBITDA grew 12% reflecting strong same-store sales, net unit growth, and improved margins; Popeyes’ EBITDA grew 80% driven by substantial cost efficiencies, while Tim Hortons EBITDA declined 6%, principally from lapping the prior year’s sales of new equipment packages related to the launch of its espresso-based drinks platform. Overall, Restaurant Brands’ reported EBITDA grew 7%, including a 4% tailwind from the weaker US dollar that was offset by a 2% headwind from new accounting rules that reduced reported EBITDA, but which had no impact on cash flow.

Despite continued earnings growth this quarter, QSR’s share price has declined nearly 10% this year amidst concerns that the recent weakness in Tim Hortons’ same-store sales growth will persist. QSR currently trades at about 19 times our estimate of 2018 free cash flow, an inexpensive valuation on an absolute and relative basis, compared with its franchised restaurant peers which trade at more than 25 times free cash flow. We believe that the recent slowdown in same-store sales growth at Tim Hortons will ultimately prove temporary, and expect the new “Winning Together” plan and recent leadership changes to enable Tim Hortons to return to its historical rates of growth.

From Bill Ackman (Trades, Portfolio)'s first-quarter 2018 shareholder letter.



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Bill Ackman Comments on Restaurant Brands - Nov 16, 2017

We consider Restaurant Brands’ (NYSE:QSR) franchised business model to be a high-quality, capital-light, growing annuity that generates high-margin brand royalty fees from its three brands: Burger King, Tim Hortons and Popeyes. The company has an extremely capable management team, is backed by an owner-oriented sponsor (3G), and has a large unit growth opportunity that requires virtually no incremental capital. The company’s operating strategy is highly scalable and replicable, which should provide opportunities for additional value-creating acquisitions over time.

Restaurant Brands reported continued earnings growth for the third quarter of 2017. The company delivered strong net unit growth at each of its three brands and made progress with Popeyes’ cost structure. Performance at Burger King was particularly impressive this quarter, but was somewhat offset by softness at Tim Hortons.

Same-store-sales this quarter grew 3.6% at Burger King, with 4% growth in the US as the company continues to improve its mix of premium and value offerings. Tim Hortons’ same-store-sales were roughly flat, as customers have been slow to try the espresso-based drinks and new offerings on the lunch menu that were introduced at the end of the quarter. We believe sales in recent quarters have also been negatively impacted by the recent public dispute with a group of franchisees. Net units grew 6%, reflecting strong growth across all of the brands. Burger King reported 7% net unit growth, which was its highest level in the last decade.

Organic EBITDA grew 8%, with 16% growth at Burger King, 1% declines at Tim Hortons, and a 40% increase at Popeyes. Growth at Burger King reflected strong same-store sales, substantial net unit growth, and improved franchised margins. The slight decline at Tim Hortons was due primarily to a price reduction on supplies sold to its franchisees and an increase in costs. While these items depressed earnings in the current quarter, they represent an investment in improving relationships with Tim Hortons’ franchisees. Popeyes’ growth was due to unit growth and cost reductions. Overall, Restaurant Brand’s reported EBITDA grew 10%, due to a 2% tailwind from the weaker USD.

We believe that Restaurant Brands remains a compelling value at 21 times our estimate of 2018 free cash flow per share in light of our belief that the company can grow free cash per share in the mid-to-high teens for the foreseeable future.

From Bill Ackman (Trades, Portfolio)'s third quarter 2017 shareholder letter.

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Bill Ackman Comments on Automatic Data Procession - Aug 18, 2017

Restaurant Brands reported continued earnings growth for the second quarter of 2017. The company delivered strong net unit growth at each of its three brands and significantly improved Popeyes’ cost structure in its first full quarter of ownership. Same-store-sales growth was mixed, as Burger King returned to growth and Tim Hortons results modestly declined.

Same-store-sales this quarter showed strong growth of nearly 4% at Burger King, with 3% growth in the U.S. as the company struck a better balance between value and premium offerings. Tim Hortons’ same-store-sales declined just under 1%, due to weakness in its baked goods offerings and lunch day part. A recent public dispute with a group of franchisees may have also contributed to the decline this quarter. We believe the company is taking the appropriate steps to improve franchisee relationships and expect that the recent introduction of espresso-based drinks and a new mobile app will enhance future sales.

Net units grew 6%, the highest rate in several years, reflecting strong growth across all of the brands. The company also announced an agreement with an existing Burger King franchisee to develop Tim Hortons restaurants in Spain, which represents the brand’s fourth international development agreement.

As a result of same-store-sales and net unit growth, Restaurant Brands’ organic revenue grew 6%. The company also continued to reduce costs, most notably at Popeyes, where margins increased by nearly 1,500 basis points. As a result of strong top line growth and cost reduction, Restaurant Brands grew organic EBITDA 9% this quarter. Reported EBITDA grew 6%, due to the headwind from the strengthening U.S. dollar.

We sold approximately 25% of our stake in QSR as its strong price appreciation year-to-date, and over the last 12 months, made it a disproportionately large percentage of the portfolio.

From Bill Ackman (Trades, Portfolio)'s second quarter 2017 shareholder letter.

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Bill Ackman Comments on Restaurant Brands International - May 12, 2017

QSR (NYSE:QSR) delivered strong earnings growth in the first quarter as the company maintained a high level of net unit growth and continued to achieve cost and capital efficiencies at Tim Hortons. Same-store sales growth decelerated from the pace of previous quarters and was roughly flat with prior year levels at both Burger King and Tim Hortons. QSR launched several new products during the second quarter including espresso-based drinks at Tim Hortons and the Steakhouse King hamburger at Burger King. These new offerings should help drive improved same-store sales results in future quarters.

QSR achieved net unit growth of 5% at both concepts and continued to enter into development agreements in new markets. QSR made additional progress improving Tim Hortons’ cost structure as it increased margins in the distribution businesses by nearly 300 basis points and further reduced the company’s capital requirements. As a result of the net unit growth and further cost efficiencies, organic EBITDA grew 7% and EPS grew nearly 20%.

QSR completed the acquisition of Popeyes Louisiana Kitchen at the end of March. We believe that QSR can meaningfully improve Popeye’s cost structure and can dramatically accelerate its unit growth, which will further enhance the company’s future growth profile.

From Bill Ackman (Trades, Portfolio)'s first quarter 2017 shareholder letter.


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Bill Ackman Comments on Restaurant Brands International - May 08, 2017

QSR’s franchised business model is best described as a capital-light, high-growth annuity. The company earns high-margin, brand royalty franchise fees (4% to 5% of unit sales) from Burger King and Tim Hortons franchisee operated stores which are relatively insulated from economic cycles. As a result of the business’ structure and the market in which it operates, significant unit growth requires no capital from QSR (NYSE:QSR).

The company’s controlling shareholder 3G is an ideal operating partner and sponsor. It has installed an excellent management team and created a unique and impactful performance culture, compensation system, and business processes. We believe 3G’s highly scalable and replicable operating strategy can be applied to potential future acquisition opportunities.

QSR’s intrinsic value meaningfully increased in 2016, as the company continued to deliver strong financial performance: 16% organic EBITDA growth and 45% EPS growth. The high rate of EBITDA growth was driven by 2% Same-Store Sales (SSS) growth at Burger King and 3% at Tim Hortons, 5% net unit growth at both concepts, and continued cost reduction at Tim Hortons. QSR improved Tim Hortons’ EBITDA margins by 500 basis points in 2016, due to margin improvement in both the franchise and distribution businesses and a 12% reduction in overhead costs. QSR’s reported EBITDA grew 13%, including a 3% headwind from foreign exchange.

As a result of the positive business momentum, the total return for Restaurant Brands’ shares was 29.2% in 2016. In February 2017, QSR announced the acquisition of Popeyes Louisiana Kitchen. We believe QSR will be able to meaningfully improve Popeye’s cost structure and significantly accelerate its growth in new units, which will further increase Restaurant Brands’ future earnings growth and intrinsic value.

From 2016 annual letter to shareholders of Pershing Square by Bill Ackman (Trades, Portfolio).

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Bill Ackman Comments on Restaurant Brands International - Mar 30, 2017



QSR (NYSE:QSR)’s franchised business model is best described as a capital-light, high-growth annuity. The company earns high-margin, brand royalty franchise fees (4% to 5% of unit sales) from Burger King and Tim Hortons franchisee operated stores which are relatively insulated from economic cycles. As a result of the business’ structure and the market in which it operates, significant unit growth requires no capital from QSR.

The company’s controlling shareholder 3G is an ideal operating partner and sponsor. It has installed an excellent management team and created a unique and impactful performance culture, compensation system, and business processes. We believe 3G’s highly scalable and replicable operating strategy can be applied to potential future acquisition opportunities.

QSR’s intrinsic value meaningfully increased in 2016, as the company continued to deliver strong financial performance: 16% organic EBITDA growth and 45% EPS growth. The high rate of EBITDA growth was driven by 2% Same-Store Sales (SSS) growth at Burger King and 3% at Tim Hortons, 5% net unit growth at both concepts, and continued cost reduction at Tim Hortons. QSR improved Tim Hortons’ EBITDA margins by 500 basis points in 2016, due to margin improvement in both the franchise and distribution businesses and a 12% reduction in overhead costs. QSR’s reported EBITDA grew 13%, including a 3% headwind from foreign exchange.

As a result of the positive business momentum, the total return for Restaurant Brands’ shares was 29.2% in 2016. In February 2017, QSR announced the acquisition of Popeyes Louisiana Kitchen. We believe QSR will be able to meaningfully improve Popeye’s cost structure and significantly accelerate its growth in new units, which will further increase Restaurant Brands’ future earnings growth and intrinsic value.



From Bill Ackman (Trades, Portfolio)'s Pershing Square 2016 annual report.


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Top Ranked Articles about Restaurant Brands International Inc

Bill Ackman’s Top 5 Holdings as of 3rd Quarter Activist investor’s top two holdings are Burger King parent and home improvement retailer
Pershing Square manager Bill Ackman (Trades, Portfolio)’s top five holdings as of the third quarter are Restaurant Brands International Inc. (NYSE:QSR), Lowe’s Companies Inc. (NYSE:LOW), Chipotle Mexican Grill Inc. (NYSE:CMG), United Technologies Corp. (NYSE:UTX) and Automatic Data Processing Inc. (NASDAQ:ADP) according to GuruFocus top 10 holdings data. Read more...
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QSR (NYSE:QSR)’s total shareholder return declined 1% during the third quarter and by 7% year to date. Despite the stock’s performance, overall results remain strong, as free cash flow per share growth has increased more than 30% this year due to a combination of positive same-store stores growth, strong net unit growth and a substantial benefit from last year’s refinancing of high-cost preferred stock. We attribute the weakness in the company’s share price to investor concerns regarding the ongoing slowdown in same-store sales at Tim Hortons, which were flat in 2017 and have not yet shown a meaningful improvement in 2018. Read more...
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According to GuruFocus’ top 10 holdings pages, Pershing Square fund manager Bill Ackman (Trades, Portfolio)’s top four holdings as of June 30 are Restaurant Brands International Inc. (NYSE:QSR), Chipotle Mexican Grill Inc. (NYSE:CMG), Automatic Data Processing Inc. (NASDAQ:ADP) and Mondelez International Inc. (NASDAQ:MDLZ). Read more...

Ratios

vs
industry
vs
history
PE Ratio 16.75
QSR's PE Ratio is ranked higher than
57% of the 236 Companies
in the Global Restaurants industry.

( Industry Median: 25.91 vs. QSR: 16.75 )
Ranked among companies with meaningful PE Ratio only.
QSR' s PE Ratio Range Over the Past 10 Years
Min: 16.48  Med: 37.76 Max: 76.94
Current: 16.75
16.48
76.94
Forward PE Ratio 14.51
QSR's Forward PE Ratio is ranked higher than
71% of the 58 Companies
in the Global Restaurants industry.

( Industry Median: 19.69 vs. QSR: 14.51 )
Ranked among companies with meaningful Forward PE Ratio only.
N/A
PE Ratio without NRI 16.75
QSR's PE Ratio without NRI is ranked higher than
57% of the 237 Companies
in the Global Restaurants industry.

( Industry Median: 25.39 vs. QSR: 16.75 )
Ranked among companies with meaningful PE Ratio without NRI only.
QSR' s PE Ratio without NRI Range Over the Past 10 Years
Min: 16.48  Med: 37.76 Max: 76.94
Current: 16.75
16.48
76.94
Price-to-Owner-Earnings 86.31
QSR's Price-to-Owner-Earnings is ranked lower than
99.99% of the 136 Companies
in the Global Restaurants industry.

( Industry Median: 23.88 vs. QSR: 86.31 )
Ranked among companies with meaningful Price-to-Owner-Earnings only.
QSR' s Price-to-Owner-Earnings Range Over the Past 10 Years
Min: 84.96  Med: 91.97 Max: 151.81
Current: 86.31
84.96
151.81
PB Ratio 6.41
QSR's PB Ratio is ranked lower than
84% of the 311 Companies
in the Global Restaurants industry.

( Industry Median: 3.03 vs. QSR: 6.41 )
Ranked among companies with meaningful PB Ratio only.
QSR' s PB Ratio Range Over the Past 10 Years
Min: 3.8  Med: 6.45 Max: 8.2
Current: 6.41
3.8
8.2
PS Ratio 5.13
QSR's PS Ratio is ranked lower than
93% of the 318 Companies
in the Global Restaurants industry.

( Industry Median: 1.09 vs. QSR: 5.13 )
Ranked among companies with meaningful PS Ratio only.
QSR' s PS Ratio Range Over the Past 10 Years
Min: 3.98  Med: 5.66 Max: 8.34
Current: 5.13
3.98
8.34
Price-to-Free-Cash-Flow 23.48
QSR's Price-to-Free-Cash-Flow is ranked higher than
54% of the 127 Companies
in the Global Restaurants industry.

( Industry Median: 22.97 vs. QSR: 23.48 )
Ranked among companies with meaningful Price-to-Free-Cash-Flow only.
QSR' s Price-to-Free-Cash-Flow Range Over the Past 10 Years
Min: 14.79  Med: 23.53 Max: 45.78
Current: 23.48
14.79
45.78
Price-to-Operating-Cash-Flow 22.04
QSR's Price-to-Operating-Cash-Flow is ranked lower than
78% of the 174 Companies
in the Global Restaurants industry.

( Industry Median: 12.27 vs. QSR: 22.04 )
Ranked among companies with meaningful Price-to-Operating-Cash-Flow only.
QSR' s Price-to-Operating-Cash-Flow Range Over the Past 10 Years
Min: 13.37  Med: 22.43 Max: 39.99
Current: 22.04
13.37
39.99
EV-to-EBIT 14.77
QSR's EV-to-EBIT is ranked higher than
57% of the 252 Companies
in the Global Restaurants industry.

( Industry Median: 18.45 vs. QSR: 14.77 )
Ranked among companies with meaningful EV-to-EBIT only.
QSR' s EV-to-EBIT Range Over the Past 10 Years
Min: 14.64  Med: 25.5 Max: 6124.9
Current: 14.77
14.64
6124.9
EV-to-EBITDA 13.49
QSR's EV-to-EBITDA is ranked lower than
57% of the 275 Companies
in the Global Restaurants industry.

( Industry Median: 13.96 vs. QSR: 13.49 )
Ranked among companies with meaningful EV-to-EBITDA only.
QSR' s EV-to-EBITDA Range Over the Past 10 Years
Min: 13.33  Med: 22.85 Max: 338.7
Current: 13.49
13.33
338.7
EV-to-Revenue 5.26
QSR's EV-to-Revenue is ranked lower than
93% of the 331 Companies
in the Global Restaurants industry.

( Industry Median: 1.22 vs. QSR: 5.26 )
Ranked among companies with meaningful EV-to-Revenue only.
QSR' s EV-to-Revenue Range Over the Past 10 Years
Min: 7.3  Med: 8.8 Max: 20.5
Current: 5.26
7.3
20.5
PEG Ratio 0.68
QSR's PEG Ratio is ranked higher than
96% of the 113 Companies
in the Global Restaurants industry.

( Industry Median: 2.32 vs. QSR: 0.68 )
Ranked among companies with meaningful PEG Ratio only.
QSR' s PEG Ratio Range Over the Past 10 Years
Min: 0  Med: 0 Max: 0.73
Current: 0.68
0
0.73
Current Ratio 1.34
QSR's Current Ratio is ranked lower than
54% of the 321 Companies
in the Global Restaurants industry.

( Industry Median: 1.12 vs. QSR: 1.34 )
Ranked among companies with meaningful Current Ratio only.
QSR' s Current Ratio Range Over the Past 10 Years
Min: 1.06  Med: 1.36 Max: 3.45
Current: 1.34
1.06
3.45
Quick Ratio 1.27
QSR's Quick Ratio is ranked higher than
51% of the 321 Companies
in the Global Restaurants industry.

( Industry Median: 0.98 vs. QSR: 1.27 )
Ranked among companies with meaningful Quick Ratio only.
QSR' s Quick Ratio Range Over the Past 10 Years
Min: 1.01  Med: 1.31 Max: 3.38
Current: 1.27
1.01
3.38
Days Inventory 13.42
QSR's Days Inventory is ranked lower than
51% of the 315 Companies
in the Global Restaurants industry.

( Industry Median: 12.55 vs. QSR: 13.42 )
Ranked among companies with meaningful Days Inventory only.
QSR' s Days Inventory Range Over the Past 10 Years
Min: 0.63  Med: 12.91 Max: 53.82
Current: 13.42
0.63
53.82
Days Sales Outstanding 33.91
QSR's Days Sales Outstanding is ranked lower than
87% of the 271 Companies
in the Global Restaurants industry.

( Industry Median: 9.04 vs. QSR: 33.91 )
Ranked among companies with meaningful Days Sales Outstanding only.
QSR' s Days Sales Outstanding Range Over the Past 10 Years
Min: 33.91  Med: 38.01 Max: 136.43
Current: 33.91
33.91
136.43
Days Payable 75.51
QSR's Days Payable is ranked lower than
99.99% of the 256 Companies
in the Global Restaurants industry.

( Industry Median: 45.50 vs. QSR: 75.51 )
Ranked among companies with meaningful Days Payable only.
QSR' s Days Payable Range Over the Past 10 Years
Min: 32.65  Med: 61.88 Max: 242.68
Current: 75.51
32.65
242.68

Dividend & Buy Back

vs
industry
vs
history
Dividend Yield % 2.90
QSR's Dividend Yield % is ranked lower than
54% of the 341 Companies
in the Global Restaurants industry.

( Industry Median: 1.56 vs. QSR: 2.90 )
Ranked among companies with meaningful Dividend Yield % only.
QSR' s Dividend Yield % Range Over the Past 10 Years
Min: 0.22  Med: 1.24 Max: 2.93
Current: 2.9
0.22
2.93
Dividend Payout Ratio 0.46
QSR's Dividend Payout Ratio is ranked higher than
58% of the 211 Companies
in the Global Restaurants industry.

( Industry Median: 0.34 vs. QSR: 0.46 )
Ranked among companies with meaningful Dividend Payout Ratio only.
QSR' s Dividend Payout Ratio Range Over the Past 10 Years
Min: 0.31  Med: 0.43 Max: 0.88
Current: 0.46
0.31
0.88
Forward Dividend Yield % 3.30
QSR's Forward Dividend Yield % is ranked lower than
53% of the 331 Companies
in the Global Restaurants industry.

( Industry Median: 2.03 vs. QSR: 3.30 )
Ranked among companies with meaningful Forward Dividend Yield % only.
N/A
5-Year Yield-on-Cost % 2.86
QSR's 5-Year Yield-on-Cost % is ranked lower than
60% of the 398 Companies
in the Global Restaurants industry.

( Industry Median: 1.79 vs. QSR: 2.86 )
Ranked among companies with meaningful 5-Year Yield-on-Cost % only.
QSR' s 5-Year Yield-on-Cost % Range Over the Past 10 Years
Min: 0.22  Med: 1.24 Max: 2.93
Current: 2.86
0.22
2.93
3-Year Average Share Buyback Ratio -6.50
QSR's 3-Year Average Share Buyback Ratio is ranked lower than
74% of the 203 Companies
in the Global Restaurants industry.

( Industry Median: -0.80 vs. QSR: -6.50 )
Ranked among companies with meaningful 3-Year Average Share Buyback Ratio only.
QSR' s 3-Year Average Share Buyback Ratio Range Over the Past 10 Years
Min: -6.5  Med: -5.1 Max: -3.8
Current: -6.5
-6.5
-3.8

Valuation & Return

vs
industry
vs
history
Price-to-Median-PS-Value 0.90
QSR's Price-to-Median-PS-Value is ranked higher than
61% of the 266 Companies
in the Global Restaurants industry.

( Industry Median: 1.08 vs. QSR: 0.90 )
Ranked among companies with meaningful Price-to-Median-PS-Value only.
QSR' s Price-to-Median-PS-Value Range Over the Past 10 Years
Min: 0.8  Med: 0.99 Max: 1.21
Current: 0.9
0.8
1.21
Earnings Yield (Greenblatt) % 6.77
QSR's Earnings Yield (Greenblatt) % is ranked higher than
67% of the 331 Companies
in the Global Restaurants industry.

( Industry Median: 4.25 vs. QSR: 6.77 )
Ranked among companies with meaningful Earnings Yield (Greenblatt) % only.
QSR' s Earnings Yield (Greenblatt) % Range Over the Past 10 Years
Min: 0.3  Med: 3.9 Max: 6.84
Current: 6.77
0.3
6.84

More Statistics

Revenue (TTM) (Mil) $5,206.70
EPS (TTM) $ 3.37
Beta1.01
Volatility19.52%
52-Week Range $52.06 - 65.17
Shares Outstanding (Mil)252.62

Analyst Estimate

Dec18 Dec19 Dec20
Revenue (Mil $) 7,171 7,497 7,890
EBIT (Mil $)
EBITDA (Mil $)
EPS ($) 3.51 3.77 4.14
EPS without NRI ($) 3.51 3.77 4.14
EPS Growth Rate
(Future 3Y To 5Y Estimate)
N/A
Dividends per Share ($)

Piotroski F-Score Details

Piotroski F-Score: 55
Positive ROAY
Positive CFROAY
Higher ROA yoyN
CFROA > ROAY
Lower Leverage yoyN
Higher Current Ratio yoyN
Less Shares Outstanding yoyY
Higher Gross Margin yoyY
Higher Asset Turnover yoyN

Personalized Checklist

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