RESTAURANT BRANDS INTERN (QSR.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:QSR - CA76131D1033 - Common Stock
93.74 CAD
-0.85 (-0.9%)
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. While QSR belongs to the best of the industry regarding profitability, there are concerns on its financial health. QSR is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year QSR was profitable.
- QSR had a positive operating cash flow in the past year.
- Each year in the past 5 years QSR has been profitable.
- Each year in the past 5 years QSR had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of QSR (3.59%) is better than 68.42% of its industry peers.
- QSR's Return On Equity of 27.27% is amongst the best of the industry. QSR outperforms 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 3 year average ROIC (8.03%) for QSR is below the current ROIC(8.41%), indicating increased profibility in the last year.
| 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.
- Looking at the Operating Margin, with a value of 25.95%, QSR is in the better half of the industry, outperforming 78.95% of the companies in the same industry.
- In the last couple of years the Operating Margin of QSR has declined.
- QSR has a better Gross Margin (54.59%) than 63.16% of its industry peers.
- 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.
- QSR has more shares outstanding than it did 1 year ago.
- Compared to 5 years ago, QSR has more shares outstanding
- The debt/assets ratio for QSR has remained at the same level compared to a year ago.
2.2 Solvency
- QSR has an Altman-Z score of 1.38. This is a bad value and indicates that QSR is not financially healthy and even has some risk of bankruptcy.
- QSR's Altman-Z score of 1.38 is fine compared to the rest of the industry. QSR outperforms 73.68% of its industry peers.
- The Debt to FCF ratio of QSR is 10.93, which is on the high side as it means it would take QSR, 10.93 years of fcf income to pay off all of its debts.
- QSR has a Debt to FCF ratio of 10.93. This is in the better half of the industry: QSR outperforms 63.16% of its industry peers.
- 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 | 1.38 |
ROIC/WACC1.04
WACC8.06%
2.3 Liquidity
- A Current Ratio of 1.06 indicates that QSR should not have too much problems paying its short term obligations.
- With a decent Current ratio value of 1.06, QSR is doing good in the industry, outperforming 73.68% of the companies in the same industry.
- 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 has a Quick ratio of 0.98. This is in the better half 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
- 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 Y11.48%
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
- With a Price/Earnings ratio of 19.29, QSR is valued on the expensive side.
- The rest of the industry has a similar Price/Earnings ratio as QSR.
- Compared to an average S&P500 Price/Earnings ratio of 27.21, QSR is valued a bit cheaper.
- With a Price/Forward Earnings ratio of 16.83, QSR is valued correctly.
- 63.16% of the companies in the same industry are more expensive than QSR, based on the Price/Forward Earnings ratio.
- When comparing the Price/Forward Earnings ratio of QSR to the average of the S&P500 Index (25.98), we can say QSR is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.29 | ||
| Fwd PE | 16.83 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, QSR is valued a bit cheaper than 63.16% of the companies in the same industry.
- 63.16% of the companies in the same industry are more expensive than QSR, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.68 | ||
| EV/EBITDA | 12.9 |
4.3 Compensation for Growth
- QSR's 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)4.76
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.
- Compared to an average industry Dividend Yield of 2.40, QSR pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.81, 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
- 118.00% of the earnings are spent on dividend by QSR. 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 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 19.29 and the Price/Book (PB) ratio is 6.6.
How financially healthy is RESTAURANT BRANDS INTERN?
The financial health rating of RESTAURANT BRANDS INTERN (QSR.CA) is 3 / 10.