RESTAURANT BRANDS INTERN (QSR) Stock Fundamental Analysis
NYSE:QSR - New York Stock Exchange, Inc. - CA76131D1033 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to QSR. QSR was compared to 135 industry peers in the Hotels, Restaurants & Leisure industry. While QSR belongs to the best of the industry regarding profitability, there are 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
QSR had positive earnings in the past year.
QSR had a positive operating cash flow in the past year.
In the past 5 years QSR has always been profitable.
In the past 5 years QSR always reported a positive cash flow from operatings.
1.2 Ratios
QSR has a Return On Assets of 3.82%. This is in the better half of the industry: QSR outperforms 62.22% of its industry peers.
Looking at the Return On Equity, with a value of 30.49%, QSR belongs to the top of the industry, outperforming 84.44% of the companies in the same industry.
QSR has a Return On Invested Capital of 8.29%. This is in the better half of the industry: QSR outperforms 67.41% of its industry peers.
QSR had an Average Return On Invested Capital over the past 3 years of 8.03%. This is significantly below the industry average of 14.13%.
The last Return On Invested Capital (8.29%) for QSR is above the 3 year average (8.03%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.82% | ||
| ROE | 30.49% | ||
| ROIC | 8.29% |
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
With a decent Profit Margin value of 10.82%, QSR is doing good in the industry, outperforming 77.04% 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.
QSR has a Operating Margin of 26.31%. This is amongst the best in the industry. QSR outperforms 92.59% of its industry peers.
In the last couple of years the Operating Margin of QSR has declined.
Looking at the Gross Margin, with a value of 56.03%, QSR is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
QSR's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.31% | ||
| PM (TTM) | 10.82% | ||
| GM | 56.03% |
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.
QSR has more shares outstanding than it did 1 year ago.
The number of shares outstanding for QSR has been increased compared to 5 years ago.
Compared to 1 year ago, QSR has about the same debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.38, we must say that QSR is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of QSR (1.38) is comparable to the rest of the industry.
QSR has a debt to FCF ratio of 12.37. This is a negative value and a sign of low solvency as QSR would need 12.37 years to pay back of all of its debts.
The Debt to FCF ratio of QSR (12.37) is comparable to the rest of the industry.
A Debt/Equity ratio of 4.40 is on the high side and indicates that QSR has dependencies on debt financing.
QSR has a worse Debt to Equity ratio (4.40) than 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.4 | ||
| Debt/FCF | 12.37 | ||
| Altman-Z | 1.38 |
ROIC/WACC1.06
WACC7.84%
2.3 Liquidity
QSR has a Current Ratio of 0.96. 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 Current ratio (0.96) which is in line with its industry peers.
QSR has a Quick Ratio of 0.96. 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 Quick ratio (0.90) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.96 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.72% over the past year.
Measured over the past 5 years, QSR shows a small growth in Earnings Per Share. The EPS has been growing by 4.05% on average per year.
QSR shows a strong growth in Revenue. In the last year, the Revenue has grown by 22.38%.
The Revenue has been growing by 8.45% on average over the past years. This is quite good.
EPS 1Y (TTM)3.72%
EPS 3Y5.7%
EPS 5Y4.05%
EPS Q2Q%2.74%
Revenue 1Y (TTM)22.38%
Revenue growth 3Y13.57%
Revenue growth 5Y8.45%
Sales Q2Q%21.28%
3.2 Future
The Earnings Per Share is expected to grow by 9.29% on average over the next years. This is quite good.
The Revenue is expected to grow by 3.50% on average over the next years.
EPS Next Y11.85%
EPS Next 2Y10.44%
EPS Next 3Y9.93%
EPS Next 5Y9.29%
Revenue Next Year9.09%
Revenue Next 2Y6.09%
Revenue Next 3Y5.3%
Revenue Next 5Y3.5%
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
Based on the Price/Earnings ratio of 20.92, the valuation of QSR can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of QSR indicates a somewhat cheap valuation: QSR is cheaper than 68.15% of the companies listed in the same industry.
QSR's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.82.
Based on the Price/Forward Earnings ratio of 17.25, the valuation of QSR can be described as rather expensive.
64.44% of the companies in the same industry are more expensive than QSR, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, QSR is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.92 | ||
| Fwd PE | 17.25 |
4.2 Price Multiples
QSR's Enterprise Value to EBITDA ratio is in line with the industry average.
70.37% of the companies in the same industry are more expensive than QSR, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.37 | ||
| EV/EBITDA | 13.79 |
4.3 Compensation for Growth
The 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)1.76
PEG (5Y)5.16
EPS Next 2Y10.44%
EPS Next 3Y9.93%
5. Dividend
5.1 Amount
QSR has a Yearly Dividend Yield of 3.43%. Purely for dividend investing, there may be better candidates out there.
QSR's Dividend Yield is rather good when compared to the industry average which is at 3.59. QSR pays more dividend than 87.41% of the companies in the same industry.
QSR's Dividend Yield is a higher than the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.43% |
5.2 History
The dividend of QSR decreases each year by -6.89%.
QSR has paid a dividend for at least 10 years, which is a reliable track record.
As QSR did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)-6.89%
Div Incr Years9
Div Non Decr Years9
5.3 Sustainability
QSR pays out 110.11% of its income as dividend. This is not a sustainable payout ratio.
DP110.11%
EPS Next 2Y10.44%
EPS Next 3Y9.93%
70.07
+0.64 (+0.92%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners86.81%
Inst Owner Change3.65%
Ins Owners1.15%
Ins Owner Change14.28%
Market Cap22.96B
Analysts78
Price Target77.26 (10.26%)
Short Float %2.59%
Short Ratio3.62
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.43% |
Yearly Dividend2.29
Dividend Growth(5Y)-6.89%
DP110.11%
Div Incr Years9
Div Non Decr Years9
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.57%
Min EPS beat(2)-5.14%
Max EPS beat(2)2.01%
EPS beat(4)1
Avg EPS beat(4)-1.93%
Min EPS beat(4)-5.14%
Max EPS beat(4)2.01%
EPS beat(8)5
Avg EPS beat(8)0.98%
EPS beat(12)8
Avg EPS beat(12)4.24%
EPS beat(16)12
Avg EPS beat(16)5.29%
Revenue beat(2)0
Avg Revenue beat(2)-0.91%
Min Revenue beat(2)-1.82%
Max Revenue beat(2)0%
Revenue beat(4)1
Avg Revenue beat(4)-0.43%
Min Revenue beat(4)-1.82%
Max Revenue beat(4)1.76%
Revenue beat(8)3
Avg Revenue beat(8)-0.42%
Revenue beat(12)7
Avg Revenue beat(12)0.34%
Revenue beat(16)10
Avg Revenue beat(16)0.58%
PT rev (1m)-3.48%
PT rev (3m)-6.14%
EPS NQ rev (1m)0.73%
EPS NQ rev (3m)0.5%
EPS NY rev (1m)-1.33%
EPS NY rev (3m)-2.11%
Revenue NQ rev (1m)0.3%
Revenue NQ rev (3m)-0.13%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-0.86%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.92 | ||
| Fwd PE | 17.25 | ||
| P/S | 2.62 | ||
| P/FCF | 20.37 | ||
| P/OCF | 16.81 | ||
| P/B | 7.37 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.79 |
EPS(TTM)3.35
EY4.78%
EPS(NY)4.06
Fwd EY5.8%
FCF(TTM)3.44
FCFY4.91%
OCF(TTM)4.17
OCFY5.95%
SpS26.79
BVpS9.51
TBVpS-42.47
PEG (NY)1.76
PEG (5Y)5.16
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.82% | ||
| ROE | 30.49% | ||
| ROCE | 10.38% | ||
| ROIC | 8.29% | ||
| ROICexc | 8.64% | ||
| ROICexgc | 42.65% | ||
| OM | 26.31% | ||
| PM (TTM) | 10.82% | ||
| GM | 56.03% | ||
| FCFM | 12.84% |
ROA(3y)4.55%
ROA(5y)3.88%
ROE(3y)38.23%
ROE(5y)34.92%
ROIC(3y)8.03%
ROIC(5y)7.44%
ROICexc(3y)8.51%
ROICexc(5y)7.9%
ROICexgc(3y)52.12%
ROICexgc(5y)49.93%
ROCE(3y)10.05%
ROCE(5y)9.31%
ROICexcg growth 3Y-4.66%
ROICexcg growth 5Y-3.62%
ROICexc growth 3Y5.76%
ROICexc growth 5Y1.01%
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%
F-Score5
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.4 | ||
| Debt/FCF | 12.37 | ||
| Debt/EBITDA | 5.29 | ||
| Cap/Depr | 83.57% | ||
| Cap/Sales | 2.72% | ||
| Interest Coverage | 3.01 | ||
| Cash Conversion | 52.64% | ||
| Profit Quality | 118.63% | ||
| Current Ratio | 0.96 | ||
| Quick Ratio | 0.9 | ||
| Altman-Z | 1.38 |
F-Score5
WACC7.84%
ROIC/WACC1.06
Cap/Depr(3y)63.87%
Cap/Depr(5y)61.25%
Cap/Sales(3y)1.88%
Cap/Sales(5y)1.97%
Profit Quality(3y)122.17%
Profit Quality(5y)145.05%
High Growth Momentum
Growth
EPS 1Y (TTM)3.72%
EPS 3Y5.7%
EPS 5Y4.05%
EPS Q2Q%2.74%
EPS Next Y11.85%
EPS Next 2Y10.44%
EPS Next 3Y9.93%
EPS Next 5Y9.29%
Revenue 1Y (TTM)22.38%
Revenue growth 3Y13.57%
Revenue growth 5Y8.45%
Sales Q2Q%21.28%
Revenue Next Year9.09%
Revenue Next 2Y6.09%
Revenue Next 3Y5.3%
Revenue Next 5Y3.5%
EBIT growth 1Y6.21%
EBIT growth 3Y6.88%
EBIT growth 5Y2.85%
EBIT Next Year22.9%
EBIT Next 3Y10.66%
EBIT Next 5Y9.29%
FCF growth 1Y-9.33%
FCF growth 3Y-7.03%
FCF growth 5Y-1.64%
OCF growth 1Y1.11%
OCF growth 3Y-4.51%
OCF growth 5Y0.36%