RESTAURANT BRANDS INTERN (QSR.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:QSR - CA76131D1033 - Common Stock
94.59 CAD
+0.43 (+0.46%)
QSR gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 19 industry peers in the Hotels, Restaurants & Leisure industry. QSR has an excellent profitability rating, 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.
- Each year in the past 5 years QSR had a positive operating cash flow.
1.2 Ratios
- With a decent Return On Assets value of 3.59%, QSR is doing good in the industry, outperforming 68.42% of the companies in the same industry.
- QSR has a better Return On Equity (27.27%) than 94.74% of its industry peers.
- 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.
- Measured over the past 3 years, the Average Return On Invested Capital 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
- QSR's Profit Margin of 9.95% is fine compared to the rest of the industry. QSR outperforms 68.42% of its industry peers.
- In the last couple of years the Profit Margin of QSR has remained more or less at the same level.
- The Operating Margin of QSR (25.95%) is better than 78.95% of its industry peers.
- QSR's Operating Margin has declined in the last couple of years.
- With a decent Gross Margin value of 54.59%, QSR is doing good in the industry, outperforming 63.16% of the companies in the same industry.
- In the last couple of years the Gross Margin of QSR has declined.
| 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
- QSR has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- Compared to 1 year ago, QSR has more shares outstanding
- 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 1.39, we must say that QSR is in the distress zone and has some risk of bankruptcy.
- QSR has a Altman-Z score of 1.39. 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.
- With a decent Debt to FCF ratio value of 10.93, QSR is doing good in 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.
- Looking at the Debt to Equity ratio, with a value of 4.05, QSR is doing worse than 63.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.05 | ||
| Debt/FCF | 10.93 | ||
| Altman-Z | 1.39 |
ROIC/WACC1.04
WACC8.07%
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 Current ratio of 1.06. This is in the better half of the industry: QSR outperforms 73.68% of its industry peers.
- A Quick Ratio of 0.98 indicates that QSR may have some problems paying its short term obligations.
- The Quick ratio of QSR (0.98) is better than 68.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 0.98 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 7.95% over the past year.
- QSR shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.05% yearly.
- The Revenue has grown by 16.82% in the past year. This is quite good.
- Measured over the past years, QSR shows a quite strong growth in Revenue. The Revenue has been growing by 8.45% on average per year.
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
- The Earnings Per Share is expected to grow by 9.41% on average over the next years. This is quite good.
- 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 Y11.53%
EPS Next 2Y10.29%
EPS Next 3Y9.59%
EPS Next 5Y9.41%
Revenue Next Year11.68%
Revenue Next 2Y7.75%
Revenue Next 3Y6.12%
Revenue Next 5Y4.31%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 19.38, the valuation of QSR can be described as rather expensive.
- The rest of the industry has a similar Price/Earnings ratio as QSR.
- Compared to an average S&P500 Price/Earnings ratio of 27.30, QSR is valued a bit cheaper.
- The Price/Forward Earnings ratio is 16.90, which indicates a correct valuation of QSR.
- Based on the Price/Forward Earnings ratio, QSR is valued a bit cheaper than the industry average as 63.16% of the companies are valued more expensively.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.32, QSR is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.38 | ||
| Fwd PE | 16.9 |
4.2 Price Multiples
- QSR's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. QSR is cheaper than 63.16% of the companies in the same industry.
- QSR's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. QSR is cheaper than 63.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.77 | ||
| EV/EBITDA | 12.95 |
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)1.68
PEG (5Y)4.78
EPS Next 2Y10.29%
EPS Next 3Y9.59%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 3.57%, QSR has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 2.39, QSR pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, QSR pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.57% |
5.2 History
- The dividend of QSR decreases each year by -6.89%.
- QSR has been paying a dividend for at least 10 years, so it has 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
- 118.00% of the earnings are spent on dividend by QSR. This is not a sustainable payout ratio.
DP118%
EPS Next 2Y10.29%
EPS Next 3Y9.59%
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 5 / 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 19.38 and the Price/Book (PB) ratio is 6.64.
How financially healthy is RESTAURANT BRANDS INTERN?
The financial health rating of RESTAURANT BRANDS INTERN (QSR.CA) is 3 / 10.