Over the past three months, Restaurant Brands International Inc (TSX:QSR)(NYSE:QSR) has fallen 15% after climbing to the over $100 mark and reaching a new 52-week high.
The stock is still up more than 25% this year but it’s definitely taken a big hit recently. The good news for investors is that this gives them an opportunity to buy the stock at more reasonable price. At over $100, the stock would have been an expensive buy, especially with one of its key brands, Tim Hortons, still struggling to generate consistent growth.
At 35 times its earnings, Restaurant Brands is still not a cheap stock to buy. However, with the company continuing to grow while generating strong profits, it’s one of the better growth stocks that investors can find on the TSX.
In addition, it also pays investors a very good dividend of 2.3% per year. What makes it even better is that the company has increased its dividend payments significantly over the years.
Four years ago, Restaurant Brands was paying just $0.12 every quarter and those payments have now increased to $0.50, for an incredible increase of 317%. That averages out to a compounded annual growth rate of 43% per year.
While that’s clearly unsustainable over the long term, it does show the company’s commitment to increasing its dividend and making the stock a formidable option for investors who are looking for passive income. Its most recent dividend hike, from $0.45 to $0.50, was a more modest 11% increase and even that may be a touch high.
Nonetheless, with the stock down and the dividend looking great, it could be an opportune time to buy Restaurant Brands.
