Burger King Stock: Is it worth investing in?
Fast food is everywhere. All eat at these places at a certain point in their lives, whether it's after Little League practice, throughout college, on a road trip, or with the grandkids.
Author:Emmanuella SheaReviewer:Frazer PughMay 25, 202126.1K Shares1.1M Views
Fast food is everywhere. All eat at these places at a certain point in their lives, whether it's after Little League practice, throughout college, on a road trip, or with the grandkids. It's a common denominator of fast and simple choices that appeal to a wide range of tastes and appetites. Quick food companies can make good investments because of their flexibility – as long as you know how they function.
Aside from McDonald's, where else can you invest if you are interested in fast-food chain stocks? Well, the next thing you should put into consideration is Burger King. This is a popular fast-food chain restaurant that attracts a lot of burger lovers. Let’s take a look at some essential aspects of Burger King and learn how this information will benefit you as an investor.
Who Owns Burger King?
Restaurant Brands International Inc. owns, manages, and licenses Tim Hortons (TH), Burger King (BK), and Popeyes (PLK) fast-service restaurants. The business is divided into three segments: TH, BK, and PLK. Donuts, timbits, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps, casseroles, hamburgers, chicken and other specialty sandwiches, french fries, beverages, chicken, chicken tenders, fried shrimp and other fish, red beans, and rice, and other food products are available at its restaurants.
The business owned or franchised 4,949 TH restaurants, 18,625 BK restaurants, and 3,451 PLK restaurants in nearly 100 countries and U.S. territories as of December 31, 2020. Restaurant Brands International Inc. is based in Toronto, Canada, and was founded in 1954.
How Did The Company Perform In The Past Months?
Restaurant Brands International Inc. (QSR) posted solid first-quarter 2021 results, beating the Zacks Consensus Estimate on earnings and revenues. Furthermore, the metrics strengthened year over year. Following the announcement, the company's stock rose 1.2 percent throughout trading hours on April 30.
The company's adjusted earnings per share of 55 cents per share is 10% higher than the Zacks Consensus Estimate of 50 cents. Furthermore, the bottom line rose by 14.6 percent from 48 cents in the previous quarter.
Net sales of $1,260 million in the first quarter beat the consensus estimate of $1,252 million.
Furthermore, due to favorable FX shifts, the top line rose 2.9 percent year over year. This, along with an improvement in retail revenue at Tim Hortons and system-wide revenues at Burger King and Popeyes, contributed to the positive results.
Is Burger King Stock Better Than Other Fast-food Chains?
For a long time, Burger King, which is operated by Restaurant Brands International (NYSE: QSR), has been chasing down McDonald's. Its plan is straightforward: reduce operational "fat" so that it can deliver cheaper prices and more directly compete with McDonald's (NYSE: MCD).
Since 2014, Burger King has introduced new products that are direct competitors to iconic McDonald's menu items, such as the Big King (vs. Big Mac) and the BBQ Rib (vs McRib). Burger King has been beefing up its coffee game, posing a more direct threat to the McCafe brand. Burger King's menu is much more varied.
Restaurant Brands International (NYSE: QSR), the corporation behind Tim Hortons and Popeyes, actually owns the fast-food chain In total, QSR owns or operates over 24,000 locations around the world, with 16,767 of those being Burger King restaurants. In the future, QSR will employ a variety of tactics to increase market share for both BK and its other companies.
Let’s Compare It To McDonald's
Apart from the "burger wars," the two fast-food chains have identical business models.
They're all trying to lure franchisees.
The only difference between the two for investors is flexibility. Your interests are automatically more hedged if you invest in a more diversified brand rather than a single brand – but QSR's high level of debt is a significant limiting factor.
McDonald's has a wider range of products under one roof and is in great financial shape.
The best thing about choosing whether to invest in McDonald's or Burger King is that you don't have to choose between the two. This isn't a lunch option; it's a selection from your investment portfolio.
What Happens If You Buy A Burger King Stock?
Serving quality food at reasonable prices from the correct places isn't enough to run a profitable fast-food company. Quick food firms' greatest profit generator is usually not the food itself. It's all about royalties, franchise fees, and leases. As a result, the most profitable fast-food franchises aren't always the ones that serve the best food. They are the most effective at attracting franchisees and assisting them in staying in the company.
So, when you invest in Burger King stocks, you will profit from your investment as long as the company receives royalties and sells branches to different business owners.
Another factor to consider is innovation. Although people's eating habits don't alter all that much, their way they do things does. Self-service kiosks, attractive décor, and delivery service are all great ways to keep fast-food customers coming back.
Burger King is continuously adapting to the new digital world, together with all other fast-food chains that are now offering their services through kiosks and changing their interiors to match the modern taste of their customers.
Finally, keep in mind that the majority of fast-food brands compete in foreign markets that aren't nearly as crowded as the United States. If the organization can catch the interest and taste of its international hosts, this reality opens the door to exponential development.
Burger King has different branches all over the world. What happens when you invest in this stock is that you get to own a share of those branches since they are collected under this brand.
Do Your Research
Your responsibility as an investor is to become knowledgeable about the company you are investing in. You’ll never know when the market will go against your position. Investing in Burger King stocks doesn’t mean you will gain forever. There are losses and wins, remember? So, do your own research even before investing in this company.
Emmanuella Shea
Author
Frazer Pugh
Reviewer
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