Shares of Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR), which owns and operates Burger King, Tim Hortons, and Popeyes chains, was up 0.58% in late morning trading on February 16. RBI stock has now dropped 5.3% in 2018. The company released its 2017 fourth quarter and full-year results on February 12.
For the full-year revenues grew to $4.57 billion compared to $4.41 billion in the prior year and net income was $626.1 million in comparison to $345.6 million in 2016. It posted net restaurant growth of 2.9% at Tim Hortons, 6.5% at its Burger King chains, and 6.1% at Popeyes. Tim Hortons posted system-side sales growth of 3%, Popeyes 5.1%, and Burger King was once again the best performer boasting 10.1% growth.
RBI management has been in an ongoing battle with its Tim Hortons franchisees. Franchisees have alleged that management is turning the brand in a bad direction in order to increase profitability while also heavying the financial burden on individual chains. Tim Hortons franchisees slashed benefits following the Ontario minimum wage hike, and the rift between them and management caused a major public relations problem.
The company delivered a dividend of $0.57 per share representing a 3.1% dividend yield. It is difficult to recommend RBI stock as it has increasingly relied on the stellar performance of its Burger King brand relative to its other two chains. The company has downplayed the rift with Tim Hortons franchisees.
Canadians are poised to spend more dining out in 2018, which may inspire investors to bet on RBI. It also offers a solid dividend going forward.
