Restaurant Brands International (QSR.TO)

Last quarter revenues were a slight miss. Burger King and Popeye's did perform well. He sees 18% EPS growth and it trades at a reasonable 19X. Good growth of stores and they're turning around Horton's. A good grower. It may be close to breaking out.

(Past Top Pick Nov.3, 2017, Down 11%) At the time, he liked its strong global growth and expected upturn at Tim Horton's. Burger King remains strong. Popeye's has turned a corner. Tim's is showing progress. He sees 17% EPS share. Trading at 19x with a reasonable growth rate. Their Q3 was a little disappointing, but he isn't changing his estimates. This will be fine over five years. They need to do a better job with their franchisees. Menu innovation is strong, but they are growing internationally (as in China) which is what investors should pay attention to.

The franchise owners battle in the news is an overhang. He's sniffing at it now. Valuation has fallen to a reasonable level. But he needs to study it more.

Likes it long term. Noise around franchisees and lawsuits, but they’re working through them. Popeye’s, etc. are starting to perform well. Has a 14-15% growth rate, not expensive. Long term, you’ll see good returns. Near term, noise will continue. The dividend of about 3% is expected to go higher.

Avoid it. Franchisees fighting with the company is not a good sign. Horton's has been a great brand, but after the QSR takeover, QSR has cut corners too much and franchisees are now pushing back. Also, the U.S. expansion didn't work.

They own Tim Hortons and Burger King and Popeye’s. These are the guys that own Kraft Heinz Company (KHC-Q) and G3 as well. They are known for cost cutting. Last quarter BK did very well but TH not so much. They have been trying to grow in the US and that has been more challenging that expected. But they are very good operators and he thinks they are going to buy something else.

Wait a few more dollars to the lower-$70's before buying there. Wait a little more. Right now, it's moving down to that level.

He likes the business and the model and the valuation is good. They had to fix their reputation in Canada. They are taking that issue very seriously and are addressing it. He thinks the leverage is manageable in this company.

The fight with franchises was probably a buying opportunity. Same-store sales have slowed and valuations have risen. He'd rather look at Starbucks.

Great ROE. They're improving brand awareness, guest experience and ordering online, like Tim Horton's coffee. Also, they're looking to expand internationally. They're trying to make domestic franchisees happier. It pays 2.9% dividend yield. 23x forward earnings with a 15% growth rate. (Analysts' price target: $87.83)

Are dividends sustainable? Yes. Their payout ratio is really low. 3% dividend yield. Global growth story. A name you want to own. They win from turning things around but also from global growth. More stores and better margins.