Is Restaurant Brands Stock a Buy in March 2023?

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.

setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 3 Must-Own Dividend Stocks
• TFSA: 2 Stocks to Create Lasting Generational Wealth
• Volatile Market? Carpe Diem With These Stock Deals Today
• What’s Next for Restaurant Brands Stock?
• 2 TSX Stocks to Buy Now and Watch Their Dividends Grow

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