Fact based stock research
Restaurant Brands International (NYSE:QSR)

CA76131D1033

How to read the ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Restaurant Brands International stock research in summary

rbi.com

ANALYSIS: With an Obermatt Combined Rank of 44 (worse than 56% compared with investment alternatives), Restaurant Brands International (Restaurants, Canada) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Restaurant Brands International are low in value (priced high) with a consolidated Value Rank of 43 (worse than 57% of alternatives) and show below-average growth (Growth Rank of 49) but are safely financed (Safety Rank of 55), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 44, is a hold recommendation based on Restaurant Brands International's financial characteristics. As the company Restaurant Brands International's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 43) and low growth (Obermatt Growth Rank of 49), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 55) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	43
Growth Rank	49
Safety Rank	55
Combined Rank	44

Country	Canada
Industry	Restaurants
Index	TSX Composite
Size class	X-Large

This stock has achievements: Top 10 Stock.

18-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Restaurant Brands International

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	41	57	32	43
GROWTH
GROWTH	53	45	35	49
SAFETY
SAFETY	22	92	67	55
SENTIMENT
SENTIMENT	n/a	88	92	^new
360° VIEW
360° VIEW	n/a	93	59	^new

Most recent update of the stock research: 18-Apr-2024. Financial reporting date used for calculating ranks: 31-Dec-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better Restaurant Brands International is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	41	57	32	43
GROWTH
GROWTH	53	45	35	49
SAFETY
SAFETY	22	92	67	55
COMBINED
COMBINED	28	86	32	44

Last update of combined financial performance: 18-Apr-2024. Stock analysis on combined financial performance: The higher the rank of Restaurant Brands International the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 43 (worse than 57% compared with alternatives), Restaurant Brands International shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Restaurant Brands International. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 88% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 22 which means that the stock price compared with what market professionals expect for future profits is higher than 78% of comparable companies, indicating a low value concerning Restaurant Brands International's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 46 which means that the stock price compared with what market professionals expect for future profit levels is higher than 54% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 22 is also low. Compared with invested capital, the stock price is higher than for 78% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 43, is a hold recommendation based on Restaurant Brands International's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Restaurant Brands International? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Restaurant Brands International only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	13	27	13	22
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	53	59	41	46
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	10	15	17	22
DIVIDEND YIELD
DIVIDEND YIELD	82	94	86	88
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	41	57	32	43

Last update of Value Rank: 18-Apr-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Restaurant Brands International; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 49 (better than 49% compared with alternatives), Restaurant Brands International shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Restaurant Brands International. Sales Growth has a rank of 75 which means that currently professionals expect the company to grow more than 75% of its competitors. Stock Returns are also above average with a rank of 63. But Capital Growth has only a rank of 21, which means that currently professionals expect the company to grow its invested capital less than 79% of its competitors. Profit Growth is also low, with a rank of only 47, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 49, is a hold recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 63% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	56	39	49	75
PROFIT GROWTH
PROFIT GROWTH	100	28	27	47
CAPITAL GROWTH
CAPITAL GROWTH	n/a	93	62	21
STOCK RETURNS
STOCK RETURNS	38	37	53	63
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	53	45	35	49

Last update of Growth Rank: 18-Apr-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Restaurant Brands International.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 55 (better than 55% compared with alternatives), the company Restaurant Brands International has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Restaurant Brands International is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Restaurant Brands International and the other two below average. Refinancing is at 68, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 68% of its competitors. But Leverage is high with a rank of 48, meaning the company has an above-average debt-to-equity ratio. It has more debt than 52% of its competitors. Liquidity is also on the riskier side with a rank of 39, meaning the company generates less profit to service its debt than 61% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 55 (better than 55% compared with alternatives), Restaurant Brands International has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Restaurant Brands International are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Restaurant Brands International and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	24	44	46	48
REFINANCING
REFINANCING	36	100	76	68
LIQUIDITY
LIQUIDITY	32	74	50	39
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	22	92	67	55

Last update of Safety Rank: 18-Apr-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Restaurant Brands International and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	37	54	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	52	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	90	86	^new
MARKET PULSE
MARKET PULSE	n/a	90	75	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	88	92	^new

Last update of Sentiment Rank: 18-Apr-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Restaurant Brands International.
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