Analyzing Restaurant Brands International (QSR) and Its Rivals

Restaurant Brands International (NYSE:QSR) is one of 382 public companies in the “Hotels, Restaurants & Leisure” industry, but how does it weigh in compared to its competitors? We will compare Restaurant Brands International to similar businesses based on the strength of its earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Volatility and Risk

Restaurant Brands International has a beta of 0.52, suggesting that its share price is 48% less volatile than the S&P 500. Comparatively, Restaurant Brands International’s competitors have a beta of 1.62, suggesting that their average share price is 62% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Restaurant Brands International and its competitors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Restaurant Brands International	0	9	16	0	2.64
Restaurant Brands International Competitors	3781	17157	25409	900	2.50

Restaurant Brands International currently has a consensus target price of $83.52, indicating a potential upside of 14.22%. As a group, “Hotels, Restaurants & Leisure” companies have a potential upside of 61.32%. Given Restaurant Brands International’s competitors higher possible upside, analysts clearly believe Restaurant Brands International has less favorable growth aspects than its competitors.

Dividends

Restaurant Brands International pays an annual dividend of $2.60 per share and has a dividend yield of 3.6%. Restaurant Brands International pays out 69.9% of its earnings in the form of a dividend. As a group, “Hotels, Restaurants & Leisure” companies pay a dividend yield of 3.3% and pay out 37.8% of their earnings in the form of a dividend. Restaurant Brands International has increased its dividend for 10 consecutive years.

Insider and Institutional Ownership

82.3% of Restaurant Brands International shares are owned by institutional investors. Comparatively, 48.6% of shares of all “Hotels, Restaurants & Leisure” companies are owned by institutional investors. 1.2% of Restaurant Brands International shares are owned by insiders. Comparatively, 22.2% of shares of all “Hotels, Restaurants & Leisure” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Restaurant Brands International and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Restaurant Brands International	$9.43 billion	$776.00 million	19.66
Restaurant Brands International Competitors	$3.53 billion	$247.14 million	-161.39

Restaurant Brands International has higher revenue and earnings than its competitors. Restaurant Brands International is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Restaurant Brands International and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Restaurant Brands International	13.12%	33.43%	6.94%
Restaurant Brands International Competitors	2.25%	-42.24%	2.07%

Summary

Restaurant Brands International beats its competitors on 10 of the 15 factors compared.

About Restaurant Brands International

Restaurant Brands International Inc. operates as a quick-service restaurant company in Canada, the United States, and internationally. It operates through four segments: Tim Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen (PLK), and Firehouse Subs (FHS). The company owns and franchises TH chain of donut/coffee/tea restaurants that offer blend coffee, tea, and espresso-based hot and cold specialty drinks; and fresh baked goods, including donuts, Timbits, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps, soups, and other food products. It is also involved in owning and franchising BK, a fast-food hamburger restaurant chain, which offers flame-grilled hamburgers, chicken and other specialty sandwiches, French fries, soft drinks, and other food items; and PLK quick service restaurants that provide Louisiana-style fried chicken, chicken tenders, fried shrimp and other seafood, red beans and rice, and other regional items. In addition, the company owns and franchises FHS quick service restaurants that offer meats and cheese, chopped salads, chili and soups, signature and other sides, soft drinks, and local specialties. The company was founded in 1954 and is headquartered in Toronto, Canada.