RESTAURANT BRANDS INTERN (QSR.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:QSR - CA76131D1033 - Common Stock
91 CAD
-0.48 (-0.52%)
We assign a fundamental rating of 5 out of 10 to QSR. QSR was compared to 19 industry peers in the Hotels, Restaurants & Leisure industry. QSR scores excellent on profitability, but there are concerns on its financial health. QSR has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- QSR had positive earnings in the past year.
- In the past year QSR had a positive cash flow from operations.
- In the past 5 years QSR has always been profitable.
- In the past 5 years QSR always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of QSR (3.59%) is better than 68.42% of its industry peers.
- With an excellent Return On Equity value of 27.27%, QSR belongs to the best of the industry, outperforming 94.74% of the companies in the same industry.
- QSR's Return On Invested Capital of 8.41% is fine compared to the rest of the industry. QSR outperforms 78.95% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for QSR is in line with the industry average of 8.63%.
- The last Return On Invested Capital (8.41%) for QSR is above the 3 year average (8.03%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.59% | ||
| ROE | 27.27% | ||
| ROIC | 8.41% |
ROA(3y)4.55%
ROA(5y)3.88%
ROE(3y)38.23%
ROE(5y)34.92%
ROIC(3y)8.03%
ROIC(5y)7.44%
1.3 Margins
- With a decent Profit Margin value of 9.95%, QSR is doing good in the industry, outperforming 68.42% of the companies in the same industry.
- In the last couple of years the Profit Margin of QSR has remained more or less at the same level.
- QSR has a Operating Margin of 25.95%. This is in the better half of the industry: QSR outperforms 78.95% of its industry peers.
- In the last couple of years the Operating Margin of QSR has declined.
- Looking at the Gross Margin, with a value of 54.59%, QSR is in the better half of the industry, outperforming 63.16% of the companies in the same industry.
- QSR's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.95% | ||
| PM (TTM) | 9.95% | ||
| GM | 54.59% |
OM growth 3Y-5.89%
OM growth 5Y-5.16%
PM growth 3Y-5.95%
PM growth 5Y1.14%
GM growth 3Y-4.56%
GM growth 5Y-2.9%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), QSR is creating some value.
- The number of shares outstanding for QSR has been increased compared to 1 year ago.
- QSR has more shares outstanding than it did 5 years ago.
- QSR has about the same debt/assets ratio as last year.
2.2 Solvency
- Based on the Altman-Z score of 1.38, we must say that QSR is in the distress zone and has some risk of bankruptcy.
- QSR has a Altman-Z score of 1.38. This is in the better half of the industry: QSR outperforms 73.68% of its industry peers.
- QSR has a debt to FCF ratio of 10.93. This is a negative value and a sign of low solvency as QSR would need 10.93 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 10.93, QSR is in the better half of the industry, outperforming 63.16% of the companies in the same industry.
- A Debt/Equity ratio of 4.05 is on the high side and indicates that QSR has dependencies on debt financing.
- With a Debt to Equity ratio value of 4.05, QSR is not doing good in the industry: 63.16% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.05 | ||
| Debt/FCF | 10.93 | ||
| Altman-Z | 1.38 |
ROIC/WACC1.07
WACC7.84%
2.3 Liquidity
- A Current Ratio of 1.06 indicates that QSR should not have too much problems paying its short term obligations.
- QSR has a better Current ratio (1.06) than 73.68% of its industry peers.
- QSR has a Quick Ratio of 1.06. This is a bad value and indicates that QSR is not financially healthy enough and could expect problems in meeting its short term obligations.
- QSR's Quick ratio of 0.98 is fine compared to the rest of the industry. QSR outperforms 68.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 0.98 |
3. Growth
3.1 Past
- QSR shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.95%.
- QSR shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.05% yearly.
- QSR shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 16.82%.
- The Revenue has been growing by 8.45% on average over the past years. This is quite good.
EPS 1Y (TTM)7.95%
EPS 3Y5.7%
EPS 5Y4.05%
EPS Q2Q%10.75%
Revenue 1Y (TTM)16.82%
Revenue growth 3Y13.57%
Revenue growth 5Y8.45%
Sales Q2Q%6.9%
3.2 Future
- QSR is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.41% yearly.
- Based on estimates for the next years, QSR will show a small growth in Revenue. The Revenue will grow by 4.31% on average per year.
EPS Next Y11.48%
EPS Next 2Y10.24%
EPS Next 3Y9.61%
EPS Next 5Y9.41%
Revenue Next Year11.68%
Revenue Next 2Y7.74%
Revenue Next 3Y6.11%
Revenue Next 5Y4.31%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- QSR is valuated rather expensively with a Price/Earnings ratio of 19.00.
- QSR's Price/Earnings ratio is in line with the industry average.
- QSR's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.39.
- QSR is valuated correctly with a Price/Forward Earnings ratio of 16.58.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of QSR indicates a somewhat cheap valuation: QSR is cheaper than 63.16% of the companies listed in the same industry.
- QSR's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.72.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19 | ||
| Fwd PE | 16.58 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of QSR is on the same level as its industry peers.
- Based on the Price/Free Cash Flow ratio, QSR is valued a bit cheaper than 63.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.41 | ||
| EV/EBITDA | 12.82 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The decent profitability rating of QSR may justify a higher PE ratio.
PEG (NY)1.65
PEG (5Y)4.69
EPS Next 2Y10.24%
EPS Next 3Y9.61%
5. Dividend
5.1 Amount
- QSR has a Yearly Dividend Yield of 3.62%. Purely for dividend investing, there may be better candidates out there.
- QSR's Dividend Yield is a higher than the industry average which is at 2.40.
- Compared to an average S&P500 Dividend Yield of 1.82, QSR pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.62% |
5.2 History
- The dividend of QSR decreases each year by -6.89%.
- QSR has paid a dividend for at least 10 years, which is a reliable track record.
- As QSR did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)-6.89%
Div Incr Years9
Div Non Decr Years9
5.3 Sustainability
- QSR pays out 118.00% of its income as dividend. This is not a sustainable payout ratio.
DP118%
EPS Next 2Y10.24%
EPS Next 3Y9.61%
RESTAURANT BRANDS INTERN / QSR.CA FAQ
What is the ChartMill fundamental rating of RESTAURANT BRANDS INTERN (QSR.CA) stock?
ChartMill assigns a fundamental rating of 5 / 10 to QSR.CA.
Can you provide the valuation status for RESTAURANT BRANDS INTERN?
ChartMill assigns a valuation rating of 4 / 10 to RESTAURANT BRANDS INTERN (QSR.CA). This can be considered as Fairly Valued.
Can you provide the profitability details for RESTAURANT BRANDS INTERN?
RESTAURANT BRANDS INTERN (QSR.CA) has a profitability rating of 7 / 10.
What are the PE and PB ratios of RESTAURANT BRANDS INTERN (QSR.CA) stock?
The Price/Earnings (PE) ratio for RESTAURANT BRANDS INTERN (QSR.CA) is 19 and the Price/Book (PB) ratio is 6.5.
How financially healthy is RESTAURANT BRANDS INTERN?
The financial health rating of RESTAURANT BRANDS INTERN (QSR.CA) is 3 / 10.