Restaurant Brands International (QSR.TO)

One of the issues with this company is that they have not made tremendous headway in their brand recognition in the US. Main strategy seems to be to increase same-store sales in Canada. Trading around 18X earnings and long-term growth is about 12%. Still a little expensive. Would prefer others. (See Top Picks.)

Has had a great run, good quarterly results recently. He tried to stay away from retailers because it is a more competitive space. Is a market leader but the retailing space is quite limited.

Remarkable Canadian story. There is an attachment. But separate the emotional side. It is expensive and has been a grower. But they can’t get the US going with the same traction. Sell but buy the coffee.

Probably has the best brand recognition of any company in Canada. Stock has fallen a little bit. Really tied to the average consumer in Canada. Reasonable good story but he is not a big fan of the retail space. You could think about picking it up if it dips further but this is one that doesn’t really excite him.

Thinks that if the economy picks up, more and more people will use it as a dining out experience. Have done a great job of expanding the menu and the price is right. Great long-term hold.

One of the best branded names in Canada and getting better exposure in US. 25% ROE and they are buying back shares. People are addicted to coffee and that is not going away anytime soon.

Well managed. Have done a good job of executing and have been increasing their dividend. Overall a pretty stable Canadian retail stock. In a good position in Canada, but in terms of their international growth it had mixed results on the US strategy.

Stock has come off quite a bit from its high and thinks it is really a bargain at this price. There are a lot of stores, but there is room to expand the menu, which is what they are working on. Also, the US is fertile ground. Have done better in the US than most Canadian retailers. Same-store sales have been okay, but not stellar, which pressured the stock. It is now a yield stock and a dividend grower.

Long-term hold? Restaurant chains don’t typically survive for the long, long term. This is a nice business. Stock is not cheap but has done well for investors. For a long-term hold, he would look somewhere else. Perhaps an integrated oil company or a bank.

Slowing same-store sales growth but are opening up 88 new stores this year. Off about 20% from the high. Trading at about 15.5X next year’s earnings. 1.7% yield. Still room for expansion.

(Market Call Minute) Very close to being a buy.

This is a very attractive entry point. Traffic growth in US and Canada was less than analysts were anticipating. Company is not loosing share. The number of visits is declining a bit. Thinks traffic will improve as economy improves.

Normally trades at around 20X forward earnings but right now is trading at around 16X. Last quarter they had same-store sales that were a little bit less but he thinks their average spend per unit was actually higher. Fragmented market place in Canada. Own 42% of the market and there is still opportunity for growth. Obviously the US is a pretty big growth market for them. The problem is that EBITDA margins shrank last quarter year-over-year 1.19%. If they can reverse that, then it would be a Buy.

Thinks the story is decelerating. Facing more challenges in Canada, McDonald’s notwithstanding. Facing higher prices. The US business is actually picking up in terms of same-store sales. Hopefully this will be able to offset some of the weakness in Canada. Valuation is too high for what they are. Seems to be taking forever to find a new CEO.

Good coffee, good service, good product line. Same-store sales growth has been slowing a little bit but he still sees growth going forward. Stock is always a little bit ahead of itself. Not cheap. Incrementally growing 6% a year. 1.71% yield.