4. Restaurant Brands International, Inc. (NYSE:QSR)
Number of Hedge Fund Holders: 22
Average Upside Potential as of July 31: 23.43%
Restaurant Brands International, Inc. (NYSE:QSR) is one of the largest quick-service restaurant companies globally. The company is the owner of popular quick-service restaurant brands including TIM HORTONS, BURGER KING, POPEYES, and FIREHOUSE SUBS. Coffee serves as the core to the widely known Tim Hortons which has been in operation since 1964, has over 5,800 restaurants, and covers over 15 markets. Other than premium coffee, the brand’s menu extends to hot and cold specialty drinks, specialty teas, fruit smoothies, fresh baked goods, and prepared foods.
Restaurant Brands International, Inc. (NYSE:QSR) is a growth company that has managed to build some of the most iconic brands worldwide while offering a strong track record of system-wide sales growth. With over 30,000 restaurants in more than 120 countries and territories, the company has over $40 billion in annual system-wide sales. It continues to accelerate its franchisee profitability through strong financial performance to drive reinvestment in restaurants as well as growth. The company closed the first quarter of 2024 with solid growth in system-wide sales which resulted in bottom-line growth for franchisees and the company. Additionally, the future growth outlook for the company for 2028 points to at least $60 billion in system-wide sales.
The company’s coffee segment Tim Hortons is a restaurant leader in Canada and is most famous for its brewed coffee and has over 70% market share. Breakfast, sandwiches, and wraps from the brand have over 60% market share while baked goods account for more than 65% market share. Other than the strong regional market share of its coffee brand, Restaurant Brands International, Inc. (NYSE:QSR) has an extensive runway for its global restaurant expansion. The company is all set to benefit from China, one of the fastest-growing coffee markets. In July, Restaurant Brands International, Inc. (NYSE:QSR) announced a co-investment of up to $50 million of capital alongside Cartesian Capital in Tims China, the parent company of the exclusive master franchisee of Tim Hortons coffee shops in China, Hong Kong, and Macau. The emerging local coffee champion Tims China aims to open over 2,750 stores by 2026.
Based on the company’s ability to translate its value proposition into robust profitability and further grow that profitability through global expansion, it serves as a promising coffee stock to invest in. As of March 31, Pershing Square is the largest shareholder in the company with a stake worth $1.85 billion. Overall, the stock was part of 22 investors’ portfolios.
