RESTAURANT BRANDS INTERN (QSR.CA) Stock Fundamental Analysis
TSX:QSR - Toronto Stock Exchange - CA76131D1033 - Common Stock - Currency: CAD
We assign a fundamental rating of 5 out of 10 to QSR. QSR was compared to 20 industry peers in the Hotels, Restaurants & Leisure industry. While QSR has a great profitability rating, there are quite some 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
QSR had positive earnings in the past year.
QSR had a positive operating cash flow in the past year.
QSR had positive earnings in each of the past 5 years.
In the past 5 years QSR always reported a positive cash flow from operatings.
1.2 Ratios
QSR has a Return On Assets of 5.07%. This is in the better half of the industry: QSR outperforms 66.67% of its industry peers.
With an excellent Return On Equity value of 39.25%, QSR belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 7.07%, QSR is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for QSR is in line with the industry average of 7.56%.
The last Return On Invested Capital (7.07%) for QSR is above the 3 year average (6.87%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.07% | ||
| ROE | 39.25% | ||
| ROIC | 7.07% |
ROA(3y)4.37%
ROA(5y)3.63%
ROE(3y)39.77%
ROE(5y)33.51%
ROIC(3y)6.87%
ROIC(5y)6.61%
1.3 Margins
QSR has a better Profit Margin (16.02%) than 77.78% of its industry peers.
QSR's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 28.30%, QSR is doing good in the industry, outperforming 77.78% of the companies in the same industry.
QSR's Operating Margin has declined in the last couple of years.
QSR's Gross Margin of 60.86% is fine compared to the rest of the industry. QSR outperforms 77.78% of its industry peers.
In the last couple of years the Gross Margin of QSR has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.3% | ||
| PM (TTM) | 16.02% | ||
| GM | 60.86% |
OM growth 3Y-1.85%
OM growth 5Y-3.6%
PM growth 3Y20.1%
PM growth 5Y8.21%
GM growth 3Y-1.08%
GM growth 5Y-0.19%
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
Compared to 5 years ago, QSR has more shares outstanding
The debt/assets ratio for QSR has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.26, we must say that QSR is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.26, QSR perfoms like the industry average, outperforming 55.56% of the companies in the same industry.
QSR has a debt to FCF ratio of 11.17. This is a negative value and a sign of low solvency as QSR would need 11.17 years to pay back of all of its debts.
QSR has a Debt to FCF ratio (11.17) which is comparable to the rest of the industry.
QSR has a Debt/Equity ratio of 4.29. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of QSR (4.29) is worse than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.29 | ||
| Debt/FCF | 11.17 | ||
| Altman-Z | 1.26 |
ROIC/WACC1.03
WACC6.84%
2.3 Liquidity
QSR has a Current Ratio of 1.02. This is a normal value and indicates that QSR is financially healthy and should not expect problems in meeting its short term obligations.
QSR has a better Current ratio (1.02) than 66.67% of its industry peers.
QSR has a Quick Ratio of 1.02. This is a bad value and indicates that QSR is not financially healthy enough and could expect problems in meeting its short term obligations.
With a decent Quick ratio value of 0.94, QSR is doing good in the industry, outperforming 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.02 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 1.55% over the past year.
QSR shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.32% yearly.
Looking at the last year, QSR shows a quite strong growth in Revenue. The Revenue has grown by 15.08% in the last year.
The Revenue has been growing slightly by 5.56% on average over the past years.
EPS 1Y (TTM)1.55%
EPS 3Y17.18%
EPS 5Y4.32%
EPS Q2Q%3.33%
Revenue 1Y (TTM)15.08%
Revenue growth 3Y12.23%
Revenue growth 5Y5.56%
Sales Q2Q%24.71%
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 11.56% yearly.
QSR is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.04% yearly.
EPS Next Y3.81%
EPS Next 2Y8.6%
EPS Next 3Y8.97%
EPS Next 5Y11.56%
Revenue Next Year19.89%
Revenue Next 2Y15.17%
Revenue Next 3Y11.54%
Revenue Next 5Y8.04%
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 18.94, QSR is valued on the expensive side.
Based on the Price/Earnings ratio, QSR is valued a bit cheaper than the industry average as 61.11% of the companies are valued more expensively.
QSR's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.51.
The Price/Forward Earnings ratio is 16.15, which indicates a correct valuation of QSR.
Compared to the rest of the industry, the Price/Forward Earnings ratio of QSR indicates a somewhat cheap valuation: QSR is cheaper than 72.22% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of QSR to the average of the S&P500 Index (93.88), we can say QSR is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.94 | ||
| Fwd PE | 16.15 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, QSR is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
QSR's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.98 | ||
| EV/EBITDA | 13.25 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates QSR does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of QSR may justify a higher PE ratio.
PEG (NY)4.97
PEG (5Y)4.38
EPS Next 2Y8.6%
EPS Next 3Y8.97%
5. Dividend
5.1 Amount
QSR has a Yearly Dividend Yield of 3.77%.
QSR's Dividend Yield is a higher than the industry average which is at 4.46.
QSR's Dividend Yield is rather good when compared to the S&P500 average which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.77% |
5.2 History
The dividend of QSR decreases each year by -2.18%.
QSR has paid a dividend for at least 10 years, which is a reliable track record.
QSR has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)-2.18%
Div Incr Years9
Div Non Decr Years9
5.3 Sustainability
80.00% of the earnings are spent on dividend by QSR. This is not a sustainable payout ratio.
DP80%
EPS Next 2Y8.6%
EPS Next 3Y8.97%
RESTAURANT BRANDS INTERN
TSX:QSR (1/29/2025, 7:00:00 PM)
89.41
-0.43 (-0.48%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners88.77%
Inst Owner ChangeN/A
Ins Owners1.11%
Ins Owner ChangeN/A
Market Cap28.94B
Analysts78.1
Price Target119.68 (33.86%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.77% |
Yearly Dividend2.63
Dividend Growth(5Y)-2.18%
DP80%
Div Incr Years9
Div Non Decr Years9
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.29%
Min EPS beat(2)-3.26%
Max EPS beat(2)-1.32%
EPS beat(4)2
Avg EPS beat(4)-0.7%
Min EPS beat(4)-3.26%
Max EPS beat(4)1.26%
EPS beat(8)5
Avg EPS beat(8)3%
EPS beat(12)9
Avg EPS beat(12)5.06%
EPS beat(16)12
Avg EPS beat(16)4.74%
Revenue beat(2)1
Avg Revenue beat(2)0.04%
Min Revenue beat(2)-1.67%
Max Revenue beat(2)1.76%
Revenue beat(4)2
Avg Revenue beat(4)0.23%
Min Revenue beat(4)-1.67%
Max Revenue beat(4)1.76%
Revenue beat(8)5
Avg Revenue beat(8)-0.07%
Revenue beat(12)9
Avg Revenue beat(12)0.79%
Revenue beat(16)10
Avg Revenue beat(16)0.66%
PT rev (1m)2.69%
PT rev (3m)0.93%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-6.71%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.73%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)6.54%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-0.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.94 | ||
| Fwd PE | 16.15 | ||
| P/S | 2.53 | ||
| P/FCF | 15.98 | ||
| P/OCF | 14.07 | ||
| P/B | 6.19 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.25 |
EPS(TTM)4.72
EY5.28%
EPS(NY)5.53
Fwd EY6.19%
FCF(TTM)5.59
FCFY6.26%
OCF(TTM)6.36
OCFY7.11%
SpS35.37
BVpS14.43
TBVpS-63.78
PEG (NY)4.97
PEG (5Y)4.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.07% | ||
| ROE | 39.25% | ||
| ROCE | 9.81% | ||
| ROIC | 7.07% | ||
| ROICexc | 7.45% | ||
| ROICexgc | 38.9% | ||
| OM | 28.3% | ||
| PM (TTM) | 16.02% | ||
| GM | 60.86% | ||
| FCFM | 15.81% |
ROA(3y)4.37%
ROA(5y)3.63%
ROE(3y)39.77%
ROE(5y)33.51%
ROIC(3y)6.87%
ROIC(5y)6.61%
ROICexc(3y)7.26%
ROICexc(5y)7.04%
ROICexgc(3y)49.12%
ROICexgc(5y)46.68%
ROCE(3y)9.54%
ROCE(5y)9.18%
ROICexcg growth 3Y9.58%
ROICexcg growth 5Y-8.74%
ROICexc growth 3Y9.24%
ROICexc growth 5Y-0.66%
OM growth 3Y-1.85%
OM growth 5Y-3.6%
PM growth 3Y20.1%
PM growth 5Y8.21%
GM growth 3Y-1.08%
GM growth 5Y-0.19%
F-Score7
Asset Turnover0.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.29 | ||
| Debt/FCF | 11.17 | ||
| Debt/EBITDA | 5.6 | ||
| Cap/Depr | 72.46% | ||
| Cap/Sales | 2.16% | ||
| Interest Coverage | 2.85 | ||
| Cash Conversion | 57.46% | ||
| Profit Quality | 98.74% | ||
| Current Ratio | 1.02 | ||
| Quick Ratio | 0.94 | ||
| Altman-Z | 1.26 |
F-Score7
WACC6.84%
ROIC/WACC1.03
Cap/Depr(3y)56.07%
Cap/Depr(5y)52.72%
Cap/Sales(3y)1.7%
Cap/Sales(5y)1.71%
Profit Quality(3y)144.1%
Profit Quality(5y)163.53%
High Growth Momentum
Growth
EPS 1Y (TTM)1.55%
EPS 3Y17.18%
EPS 5Y4.32%
EPS Q2Q%3.33%
EPS Next Y3.81%
EPS Next 2Y8.6%
EPS Next 3Y8.97%
EPS Next 5Y11.56%
Revenue 1Y (TTM)15.08%
Revenue growth 3Y12.23%
Revenue growth 5Y5.56%
Sales Q2Q%24.71%
Revenue Next Year19.89%
Revenue Next 2Y15.17%
Revenue Next 3Y11.54%
Revenue Next 5Y8.04%
EBIT growth 1Y6.91%
EBIT growth 3Y10.15%
EBIT growth 5Y1.77%
EBIT Next Year24.65%
EBIT Next 3Y13.33%
EBIT Next 5Y9.81%
FCF growth 1Y-13.52%
FCF growth 3Y14.38%
FCF growth 5Y2.2%
OCF growth 1Y-7.35%
OCF growth 3Y12.83%
OCF growth 5Y2.58%