Exploring the Sustainability of Restaurant Brands International Inc's Dividend
Restaurant Brands International Inc (QSR, Financial) recently announced a dividend of $0.55 per share, payable on 2024-01-04, with the ex-dividend date set for 2023-12-20. 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 look into Restaurant Brands International Inc's dividend performance and assess its sustainability.
Introduction to Restaurant Brands International Inc
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.
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.
Dividend Yield and Growth of Restaurant Brands International Inc
As of today, Restaurant Brands International Inc currently has a 12-month trailing dividend yield of 2.91% and a 12-month forward dividend yield of 2.92%. 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 6.63%.
Evaluating Dividend Sustainability
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 2023-09-30, Restaurant Brands International Inc's dividend payout ratio is 0.76, which may suggest that the company's dividend may not be sustainable.
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 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of the past decade, further solidifying its high profitability.
Restaurant Brands International Inc's Growth Prospects
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. 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 approximately 71.56% 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 13.30% per year on average, a rate that outperforms approximately 60.52% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 2.60%, which outperforms approximately 50.47% of global competitors.
Concluding Thoughts on Restaurant Brands International Inc's Dividend Outlook
Reflecting on Restaurant Brands International Inc's dividend payments, investors can see a history of consistent payouts accompanied by a notable growth rate. The current payout ratio, while on the higher side, is balanced by the company's solid profitability and growth metrics. These factors collectively suggest that while there may be some caution required, the dividend has potential for sustainability and growth. As the company continues to expand its global presence and adapt to market demands, it remains an interesting prospect for value investors seeking dividend income. For those looking to delve deeper into dividend opportunities, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
