Restaurant Brands International (QSR.TO)

Loves this, and has owned it for a long time. Return on Capital and Return on Equity are terrific. Valuation, compared to Starbucks (SBUX-Q) is attractive. Generating lots of free cash, buying back stock and opening new stores. Five years from now it is going to be bigger and better. $67 in 5 years is a reasonable estimate.

Had always thought the stock looked expensive. Management has changed, put a new strategy in and added more snacks. They are trying to get their average ticket up. If they are successful, they’ll do very, very well. He is re-examining his position. They are doing somewhat better in the US than in Canada. Thinks there is some pretty reasonable growth potential in the stock.

Sold his holdings last summer when it was approaching 20X earnings and McDonald’s (MCD-N) was pushing very hard on coffee sales. Likes the company and feels they have a good brand and good loyalty amongst Canadian consumers. Increasingly expanding into lunch and constantly has new products that are attracting clientele. US strategy is still hit and miss. Its franchise model gives very healthy revenues. A good company, but still too expensive for him. Its capital appreciation potential is relatively limited.

Likes this one very much. They are trying to turn this around and be more focused. If you own, you should consider letting your dividends accumulate through the DRIP. US expansion is going to be tough and will take a while. There is much more competition there. There is still enough room in Canada that they can produce a pretty good result.

The real test for this is geographic expansion. They are trying not to put a lot of capital into store owned operations in the US, but are relying on entrepreneurs to front their expansion. They are also trying to capture more lunch and dinner in Canada. This is a steady growth story. US is a bit troublesome but if you are looking for steady, reasonable growth for an extended period of time, this is a good place to be.

Expansion in the US has not worked out for them. A good company with reasonable dividend that grows over time, but they are struggling with competition in Canada. Dividend growth is slowing.

At the top end of its valuation. Doing a lot of different things to enhance their offering and increase that ticket when you go in, but it doesn’t take away from the nearly 20 PE.

This industry is intensely competitive. They are now starting to augment their menu with baked goods. Doesn’t think there is a lot left in the stock. Doesn’t know if the new CEO has the experience we are looking for. Can’t see anything that will drive the stock higher. He is looking to get out when the market gets a little bit higher.

One of the things that hurt the price is a big hedge fund that was an activist in the company that sold a lot of shares. In the meantime, this company is doing everything right and going to build another 500-800 stores in Canada. They are going to keep trying in the US. Adding new products. Management is doing all the right things.

Coffee is an incredibly competitive business and becoming even more so. They are expanding, but so is Starbucks (SBUX-Q) in Canada and Second Cup (SCU-T) is in the early, early stages of a turnaround with new management. McDonald’s (MCD-N) is becoming a bigger force. This is more of a Hold then a Buy. 2% dividend yield.

Likes this. He would have thought the stock would have taken off more. They are doing a big buyback right now and what that does is it soaks up stock, makes the denominator smaller from an EPS point of view but also makes the ROE go higher. It should be on its way to $70-$80 but it is not.

Ranks a little bit below where he would like it. A hold. Wait to see what happens. Have lots of runway to expand in the US.

Very good company. Doing a few other acquisitions to grow in the US. Want bigger partners. They are taking a bit more debt on to buy back stock, but these are shareholder friendly so she sticks with it. Growth is slowing and they are not looking to grow outside of North America.

(Market Call Minute) Very good solid dividend growth over time. Consumer staples related. Probably better ones.

An interesting name, but not something he wants to hold right now. You are paying up for a great franchise, which he is willing to do, but there hasn’t been a same-store sales turnaround as much is he would like. New CEO has a plan in place, which is coming out in February.