RESTAURANT BRANDS INTERN (QSR.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:QSR - CA76131D1033 - Common Stock
91.74 CAD
-0.34 (-0.37%)
Taking everything into account, QSR scores 5 out of 10 in our fundamental rating. QSR was compared to 19 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
- 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.
- 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 has a better Return On Invested Capital (8.41%) than 78.95% of its industry peers.
- QSR had an Average Return On Invested Capital over the past 3 years of 8.03%. This 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
- Looking at the Profit Margin, with a value of 9.95%, QSR is in the better half of 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.
- With a decent Operating Margin value of 25.95%, QSR is doing good in the industry, outperforming 78.95% of the companies in the same industry.
- QSR's Operating Margin has declined in the last couple of years.
- 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.
- 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
- Compared to 5 years ago, QSR has more shares outstanding
- Compared to 1 year ago, QSR has about the same debt to assets ratio.
2.2 Solvency
- Based on the Altman-Z score of 1.37, we must say that QSR is in the distress zone and has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 1.37, QSR is in the better half of the industry, outperforming 73.68% of the companies in the same industry.
- 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.
- The Debt to FCF ratio of QSR (10.93) is better than 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 | 1.37 |
ROIC/WACC1.07
WACC7.85%
2.3 Liquidity
- QSR has a Current Ratio of 1.06. This is a normal value and indicates that QSR is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Current ratio, with a value of 1.06, QSR is in the better half of 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 better Quick ratio (0.98) than 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
- Based on estimates for the next years, QSR will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.41% on average per year.
- 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 18.99, QSR is valued on the expensive side.
- QSR's Price/Earnings ratio is in line with the industry average.
- When comparing the Price/Earnings ratio of QSR to the average of the S&P500 Index (28.82), we can say QSR is valued slightly cheaper.
- A Price/Forward Earnings ratio of 16.57 indicates a correct valuation of QSR.
- 63.16% of the companies in the same industry are more expensive than QSR, based on the Price/Forward Earnings ratio.
- The average S&P500 Price/Forward Earnings ratio is at 25.95. QSR is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.99 | ||
| Fwd PE | 16.57 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of QSR indicates a somewhat cheap valuation: QSR is cheaper than 63.16% of the companies listed in the same industry.
- 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 | 12.78 |
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)1.65
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.
- Compared to an average industry Dividend Yield of 2.40, QSR pays a bit more dividend than its industry peers.
- QSR's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.62% |
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.
- QSR has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
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 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 18.99 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.