Restaurant Brands International Inc (TSX:QSR)(NYSE:QSR) owns the Tim Hortons, Burger King, and Popeyes restaurants. The company's popular fast food chains are well known and the business as a whole offers investors lots of long-term stability. Although the pandemic and lockdowns disrupted its operations, the business has been doing well in recent quarters. It last released its quarterly results on July 30, and Restaurant Brands reported $1.4 billion in revenue – a 37% improvement from the previous year. Net income of $391 million more than doubled.
The company is doing so well that in their latest results, it announced an increase in its share buyback authorization, which now tops $1 billion. The authorization is good for the next two years and is a strong sign to shareholders that the company is on solid footing.
Over the past year, shares of the company have risen just a modest 14%, well below the S&P 500's gains of more than 30%. The stock trades at 22 times its future earnings, which is relatively cheap compared to its rival, McDonald's (NYSE:MCD), where investors are paying a multiple of 27. Plus, Restaurant Brands also pays an attractive dividend that yields 3.4% -- higher than the 2.1% investors would collect from McDonald's stock.
There is some uncertainty ahead with the pandemic still wrecking havoc on many businesses. But with many of its restaurants offering drive-thru options, Restaurant Brands is a relatively safe business to invest in. On average, analysts see an upside of at least 15% for the stock right now.
Combine that with its above-average dividend, and this can make for a great investment to buy and hold.
