Is Restaurant Brands Stock a Buy in March 2023?

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Restaurant Brands (TSX:QSR) is a global fast-food holding company. It operates in Canada and the United States, primarily under four banners — Burger King, Tim Hortons, Popeyes Louisiana Kitchen, and Firehouse Subs. With Canada’s food service sector expected to expand at a 4.55% CAGR over the long term, the interest in stocks related to food and hospitality is currently witnessing a positive trend.  

So, is March 2023 the right time to invest in Restaurant Brands stock? Let’s dive into a few reasons why I think the answer is yes.

RBI records strong growth in Q4 

Restaurant Brands’s recent financial results are a great place to start with reasons why this stock is worth buying in March. The company’s fourth-quarter (Q4) results showed strength across the board, with overall system-wide sales growing 12% year over year.

This was driven by a massive increase in digital sales under the Burger King banner of more than 30% over the past year. Tim Hortons also saw a double-digit increase, while Popeyes delivered strong growth, bolstered by its 1,266 additional units.

Considering the entire year of 2022, this fast-food holding company’s system-wide sales increased by 13.4%. Net restaurant growth was at 4.3%, meaning most of this sales increase was driven by comparative same-store sales.

Restaurant Brands’s diluted earnings per share came in at US$3.14. The company’s net income also increased to US$1,482 million from US$1,253 million reported in 2021. Free cash flow stood at US$1,390 million while net cash from operating activities figures reached US$1,490 million.  

Overall, these results are more than solid — they’re fantastic. This is a stock I think is worth owning for the long haul, so long as the company continues to perform like this.

Shareholders to receive a higher dividend

Amid these strong results, it’s likely no surprise to see Restaurant Brands announce another hefty dividend. The company did just that, declaring a quarterly dividend of $0.74 per share. The ex-dividend date for QSR stock is Mar. 21, with this dividend payable on Apr. 5.

Currently, QSR stock yields 3.5%, and has a payout ratio of around 67%. Thus, this is a company with both the earnings power and balance sheet strength to continue to return shareholder capital over time.

Bottom line

As one of the best potential long-term holdings for most investors in the TSX, Restaurant Brands is one company I remain very bullish on. This fast-food giant is a defensive behemoth, with some of the best banners in the industry. Thus, for those seeking defensive growth as well as a reasonable dividend yield, this is a great option to consider in March 2023 and beyond.

The post Is Restaurant Brands Stock a Buy in March 2023? appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Restaurant Brands International?

Before you consider Restaurant Brands International, you’ll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in March 2023… and Restaurant Brands International wasn’t on the list.

The online investing service they’ve run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 22 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks
* Returns as of 3/7/23

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Fool contributor Chris MacDonald has positions in Restaurant Brands International. The Motley Fool recommends Restaurant Brands International. The Motley Fool has a disclosure policy.

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