An in-depth analysis of the company's dividend history, growth, and sustainability
Restaurant Brands International LP (RSTRF, Financial) recently announced a dividend of $0.55 per share, payable on 2023-10-04, with the ex-dividend date set for 2023-09-19. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Restaurant Brands International LP's dividend performance and assess its sustainability.
Understanding Restaurant Brands International LP's Business Model
Restaurant Brands International LP is a Canada-based firm. It owns, operates and franchises quick-service restaurants and possesses market recognition. It operates in three segments namely; Tim Hortons; Burger King; and Popeyes Louisiana Kitchen. Its business generates revenue from franchise revenues; property revenues from properties it leases or subleases to franchisees; and sales at restaurants owned by the company. In addition, the Tim Hortons business generates a vast majority of the revenue from sales to franchisees related to its supply chain operations, including manufacturing, procurement, warehousing, and distribution, as well as sales to retailers.
Tracing Restaurant Brands International LP's Dividend History
Restaurant Brands International LP has maintained a consistent dividend payment record since 2016. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Dissecting Restaurant Brands International LP's Dividend Yield and Growth
As of today, Restaurant Brands International LP currently has a 12-month trailing dividend yield of 3.19% and a 12-month forward dividend yield of 3.22%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Restaurant Brands International LP's annual dividend growth rate was 3.70%. Extended to a five-year horizon, this rate increased to 17.90% per year. Based on Restaurant Brands International LP's dividend yield and five-year growth rate, the 5-year yield on cost of Restaurant Brands International LP stock as of today is approximately 7.27%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Restaurant Brands International LP's dividend payout ratio is 0.66.
Restaurant Brands International LP's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Restaurant Brands International LP's profitability 8 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of past 10 years.
Peering into the Future: Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Restaurant Brands International LP's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Its revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Restaurant Brands International LP's revenue has increased by approximately 11.10% per year on average, a rate that outperforms than approximately 84.64% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Restaurant Brands International LP's earnings increased by approximately 12.10% per year on average, a rate that outperforms than approximately 56.03% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 3.60%, outperforms than approximately 51.72% of global competitors.
Conclusion
Restaurant Brands International LP's consistent dividend payments, solid growth rate, and robust payout ratio indicate a promising future for its dividend sustainability. The company's strong profitability and exceptional growth metrics further bolster this outlook. However, as with any investment, it's crucial for investors to continually monitor these factors to ensure they align with their individual investment goals and risk tolerance. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
