Restaurant Brands International (QSR.TO)

Avoid it. Franchisees fighting with the company is not a good sign. Horton's has been a great brand, but after the QSR takeover, QSR has cut corners too much and franchisees are now pushing back. Also, the U.S. expansion didn't work.

They own Tim Hortons and Burger King and Popeye’s. These are the guys that own Kraft Heinz Company (KHC-Q) and G3 as well. They are known for cost cutting. Last quarter BK did very well but TH not so much. They have been trying to grow in the US and that has been more challenging that expected. But they are very good operators and he thinks they are going to buy something else.

Wait a few more dollars to the lower-$70's before buying there. Wait a little more. Right now, it's moving down to that level.

He likes the business and the model and the valuation is good. They had to fix their reputation in Canada. They are taking that issue very seriously and are addressing it. He thinks the leverage is manageable in this company.

The fight with franchises was probably a buying opportunity. Same-store sales have slowed and valuations have risen. He'd rather look at Starbucks.

Great ROE. They're improving brand awareness, guest experience and ordering online, like Tim Horton's coffee. Also, they're looking to expand internationally. They're trying to make domestic franchisees happier. It pays 2.9% dividend yield. 23x forward earnings with a 15% growth rate. (Analysts' price target: $87.83)

Are dividends sustainable? Yes. Their payout ratio is really low. 3% dividend yield. Global growth story. A name you want to own. They win from turning things around but also from global growth. More stores and better margins.

A well-run company, he thinks. They have come off the lows after a good earnings report. Franchisees are upset, but the owners have a history of doing business this way. Management is strong and have consistently hit ROE targets. He prefers MTY Food Group Inc. (MTY-T), who focuses more on food courts.

They are terrific operators and have Warren Buffett in their corner. However they have upset franchise owners of Tim Hortons and Burger King. They are the juicer and the franchisees are the lemon: they are trying to squeeze every drop from the franchisees, but if franchisees can't make a good living, they will lose interest in the business. He doesn't own QSR because he is dubious that their model will translate into Canada. He doesn't think that Tim Hortons fits their model well. He used to own Tim Hortons and loved it and feels bad that he can't own it now, because it is part of QSR. He thinks that the tension created by QSR's model is holding back growth.

Sold his shares 6 months ago. It's always been a rich stock. He likes their foot traffic and demand across their various brands. It's not his favourite consumer name. Instead, he prefers McDonald's, or Facebook or a gambling stock. QSR is doing okay, not bad, doing well for shareholders but it's upsetting franchisees (who continue to make money off the brand). It's now not cheap at 22X earnings.

It has been a bumpy ride recently. It is probably a good entry point. Recently there was bad press about unhappy franchisees. Longer term they continue to innovate and come up with new products. He thinks they will continue to make acquisitions as well.

Is the dividend safe? They had troubles with their franchises. A famous guy in the US disclosed recently that he shorted this stock. Management has done a good job turning around Burger King and Popeyes. Earnings growth 20% and trades at 18 times 2019. Way cheaper than its 4-year average. Nice and safe dividend yield of 3.3%. He thinks it is a winner.

They had troubles with their franchises. A famous guy in the US disclosed recently that he shorted this stock. Management has done a good job turning around Burger King and Popeyes. Earnings growth 20% and trades at 18 times 2019. Way cheaper than its 4-year average. Nice and safe dividend yield of 3.3%. He thinks it is a winner. (Analysts’ price target is $85.52)

It consolidated in 2015, then broke out at the start of 2016, but now we're seeing lower lows and lower highs. Let it play out. But it's in a downtrend.

He does not own any restaurant franchise companies. Dunkin donuts is having issue today. There is a disconnect between franchisors and franchisees.