Should You Invest in Restaurant Brands International?

PHOTO CREDIT: Restaurant Brands International

OVERVIEW

Restaurant Brands International is a corporation based in the United States. The company operates restaurant chains around the world, operating under brands like Tim Hortons, Burger King, and Popeyes. The company operates, franchises, and owns thousands of these restaurants. The company was founded in 1954.

Why You Should?

  1. Restaurant Brands International has adapted well to the impacts that this pandemic has bought. As governments mandate the shutdown of in-store dining, Restaurant Brands International has seen a rise in digital and drive-through sales. The company has also shifted some of its restaurants to only be in a digital-only format for the time being.
  2. Restaurant Brands International has strong brands across its product portfolio. For example, in 2019, the company’s Popeyes division released its chicken sandwiches, something that became viral on social media. This caused a rise in the company’s sales and financial results. Similar trends have occurred in the company’s Burger King and Tim Hortons divisions.
  3. Restaurant Brands International has a strong international presence. Across all of their divisions, the company operates in over 100 countries around the world. This will benefit the company’s future growth and will also benefit its investors.
  4. Restaurant Brands International has seen rising revenues and profits over the past couple of financial reasons due to the reasons mentioned above. This will benefit the company’s future growth and will also benefit its investors in the future. This is because the company can build a stronger balance sheet. In the financial year of 2019, the company reported revenues of around 5.6 billion and profits of around 643 million. Both of these metrics are higher than what the company reported in the financial year of 2018 when they had revenues of around 5.36 billion and profits of around 612 million.
PHOTO CREDIT: Yahoo Finance

Why You Should Not?

  1. Restaurant Brands International faces tough competition from other fast-food companies (both large and small). Some of these companies include Starbucks, McDonald’s, and Dominos. All of these companies have a strong presence around the world and directly compete with Restaurant Brands International.
  2. The COVID-19 Pandemic has caused a drop in demand for the company’s products in areas with high foot traffic, which has disappeared due to the pandemic. These locations include the ones in shopping malls, airports, cruise terminals, and sporting events. This has caused sales growth to slow. However, the company looks for this to be short to mid-term.

MY OPINION

I think that Restaurant Brands International is definitely a fast food juggernaut that investors should look at due to the strong brands that it has in its portfolio, its ability to adapt to the pandemic, its strong international presence, and its rising revenues and profits. However, impacts of the COVID-19 Pandemic as well as tough competition might hurt the company.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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