| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 87.40 | -3 |
| Intrinsic value (DCF) | 47.83 | -47 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 66.00 | -27 |
Restaurant Brands International Inc. (RBI) is a leading global quick-service restaurant (QSR) company headquartered in Toronto, Canada. Operating under four iconic brands—Tim Hortons, Burger King, Popeyes Louisiana Kitchen, and Firehouse Subs—RBI serves millions of customers across 100 countries through approximately 29,000 restaurants. Tim Hortons, a Canadian staple, specializes in coffee, baked goods, and sandwiches, while Burger King is renowned for its flame-grilled burgers. Popeyes offers Louisiana-style fried chicken, and Firehouse Subs provides hearty submarine sandwiches. RBI's diversified portfolio allows it to cater to varying consumer tastes and preferences, reinforcing its stronghold in the competitive QSR sector. With a franchise-driven model, the company benefits from scalable growth and recurring revenue streams. As part of the consumer cyclical sector, RBI is well-positioned to capitalize on global demand for affordable, convenient dining options.
Restaurant Brands International presents a compelling investment case with its diversified brand portfolio, global footprint, and franchise-centric business model. The company's strong revenue base (CAD 8.4 billion in FY 2023) and stable net income (CAD 1.02 billion) underscore its profitability. A beta of 0.62 suggests lower volatility compared to the broader market, appealing to risk-averse investors. However, high total debt (CAD 15.96 billion) and capital-intensive operations pose financial risks. The dividend yield, supported by a CAD 3.45 per share payout, adds income appeal. Investors should weigh RBI's international expansion potential against macroeconomic pressures affecting consumer spending in the cyclical QSR industry.
Restaurant Brands International competes in the highly fragmented QSR industry, where differentiation and scale are critical. Its multi-brand strategy mitigates reliance on any single market segment, unlike pure-play competitors. Tim Hortons dominates Canada's coffee-and-bakery niche, competing directly with Starbucks but with a more value-oriented positioning. Burger King rivals McDonald's in the burger segment but lags in global unit count and brand recognition. Popeyes competes with KFC in the fried chicken category, leveraging its Louisiana-style authenticity as a unique selling point. Firehouse Subs faces competition from Subway and Jersey Mike's, emphasizing premium ingredients. RBI's competitive advantages include its franchising expertise, which reduces operational overhead, and its ability to cross-promote brands. However, it trails McDonald's in digital innovation and Starbucks in premium coffee perception. The company's international growth, particularly in emerging markets, offers a long-term edge, but domestic saturation and rising labor costs remain challenges.