Unpacking the Dividend Performance and Sustainability of Restaurant Brands International Inc (QSR, Financial)
Restaurant Brands International Inc(QSR) 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 Incs dividend performance and assess its sustainability.
What Does Restaurant Brands International Inc Do?
Restaurant Brands International is one of the largest restaurant companies in the world, with approximately $39 billion in 2022 systemwide sales across a footprint that spanned nearly 30,000 restaurants and more than 100 countries. The firm generates revenue primarily from retail sales at its company-owned restaurants, royalty fees and lease income from franchised stores, and from its Tim Hortons supply chain operations. Formed in 2014 after 3G Capital's acquisition of Tim Hortons International, the Restaurant Brands portfolio now includes Burger King (19,000 units), Tim Hortons (5,600 units), Popeyes Louisiana Kitchen (4,100 units) and Firehouse Subs (1,250 units) as of year-end 2022.
A Glimpse at Restaurant Brands International Inc's Dividend History
Restaurant Brands International Inc has maintained a consistent dividend payment record since 2015. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Restaurant Brands International Inc's Dividend Yield and Growth
As of today, Restaurant Brands International Inc currently has a 12-month trailing dividend yield of 3.17% and a 12-month forward dividend yield of 3.21%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Restaurant Brands International Inc'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 Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Restaurant Brands International Inc stock as of today is approximately 7.11%.
The Sustainability Question: 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 Inc's dividend payout ratio is 0.67.
Restaurant Brands International Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Restaurant Brands International Inc's profitability 8 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Restaurant Brands International Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Restaurant Brands International Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Restaurant Brands International Inc's revenue has increased by approximately 7.30% per year on average, a rate that outperforms than approximately 75.3% 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 Inc's earnings increased by approximately 12.30% per year on average, a rate that outperforms than approximately 56.9% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 3.80%, which outperforms than approximately 54.02% of global competitors.
Next Steps
Based on the analysis of Restaurant Brands International Inc's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, it appears that the company has a sustainable dividend model. The company's strong profitability, consistent growth, and manageable payout ratio indicate that it is well-positioned to maintain its dividend payments in the foreseeable future. Therefore, for value investors seeking sustainable dividend income, Restaurant Brands International Inc presents a compelling investment opportunity.
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