Restaurant Brands International Inc (TSX:QSR)(NYSE:QSR) is a stock that dividend investors should be keeping a close eye on these days.
With many restaurant stocks already cutting their dividends, Restaurant Brands may be the next one to follow suit. It’s no secret that the coronavirus pandemic is making it very difficult on business, especially restaurants, to continue operating. While take out and delivery is helping ensure restaurants are still generating some revenue, there’s little doubt that Restaurant Brands will feel a hit to its financials this year.
The stock doesn’t have a long history of paying dividends and so a cut or suspension to its payouts won’t break a long streak. And that could make it easier in making such a move.
The company last declared its dividends in February when it announced its quarterly payments would be increasing from $0.50 U.S. to $0.52 U.S.
Currently, investors are earning a dividend yield of more than 4.5% per year. A key reason for that is that shares of Restaurant Brands have fallen by more than 20% year to date, pushing its yield up in the process.
The company’s already struggled with finding ways to get Tim Hortons to grow in recent years and freeing up cash flow from its dividend payments could be an easy way for the company to ease up some of the pressure it may find itself under today.
It’s conceivable that the stock may continue paying its dividend, but it’s just not one I’d rely on right now. The longer the pandemic drags on for, the more inevitable it becomes the Restaurant Brands will likely have to adjust its dividend policy at some point.
