We recently published a list of 10 High Growth Food Stocks to Buy. In this article, we are going to take a look at where Restaurant Brands International Inc. (NYSE:QSR) stands against other high growth food stocks to buy.
The global food industry has always stimulated economic growth, innovation, and a shift in consumer trends. It is projected to reach $2.2 trillion by 2032 from its market size of $1.64 trillion in 2022, at a compound annual growth rate (CAGR) of 2.99%, according to Market Research Future. Despite food being a necessity, the business dynamics within the food industry are very complex and companies must be adaptable as they navigate the complexities of rising production costs, changing consumer preferences, and global supply chain disruptions.
Within the industry, inflation remains a key topic. While it was soaring in 2022, food prices have since declined. However, they are on the rise again, causing financial strain on both consumers and businesses. As reported by the U.S. Department of Agriculture (USDA) in December 2024, grocery prices went up by 1.8% compared to the previous year, and food-away-from-home costs increased to 3.6%. Especially staple food items, including eggs and beef, had a sharp rise due to the avian flu wave and the supply limitations. These price fluctuations create a challenge for food companies, which must adjust their pricing strategies without sacrificing demand or alienating customers.
On the other hand, consumer behavior is also changing, putting forth factors like health, sustainability, and convenience. Thus, specialty stores have seen an increase in the demand for fresh and raw food. At the same time, budget-conscious shoppers are gravitating toward discount retailers, highlighting the growing importance of affordability. Thus, food companies must meet diverse consumer needs driven by the dual trend of seeking premium and value-oriented products.
Furthermore, technological breakthroughs are also contributing to the industry’s transformation. Supply chain optimization, waste reduction, and increased production efficiency are being greatly aided by automation and artificial intelligence (AI). Moreover, robotics is deployed in food processing to increase production and efficiency, while AI-driven demand forecasting helps avoid inventory problems. Consumers’ growing need for convenience is being met by the usage of digital ordering and delivery platforms, which opens new avenues for revenue growth. By adopting these technologies, companies are keen to improve operations and take advantage of growth opportunities in a market that is constantly evolving.
Even with economic instability, the future of the food industry is promising, driven by global population growth, urbanization, and the expanding middle class in emerging markets. In addition, new investment opportunities are being created by the popularity of plant-based meals and alternative proteins. Thus, big industry players are prioritizing the integration of technology, sustainability, and innovation in their business model to capitalize on future growth potential.
Many stocks stand out for their capacity to capitalize on this growth potential.
Methodology
To curate our list of the 10 High Growth Food Stocks to Buy, we used Finviz stock screener to gather stocks within the food sector with a strong market capitalization. We then narrowed the list based on each company’s five-year compound annual growth rate (CAGR) to identify those demonstrating consistent revenue expansion.
Furthermore, we also considered the number of hedge funds holding stakes in each stock, using data from Insider Monkey’s hedge fund database, which tracks the activity of 1,009 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close-up of a hamburger, french fries, and a soft drink, representing the fast food chain.
Restaurant Brands International Inc. (NYSE:QSR)
Number of Hedge Funds Holders: 22
5-year Revenue CAGR: 14.05%
Restaurant Brands International Inc. (NYSE:QSR) is strengthening its position as a global leader in the quick-service restaurant market, with a diverse portfolio that includes Tim Hortons, Burger King, Popeyes, and Firehouse Subs. The company has been actively refining its operations and expanding internationally, earning its spot in the list of the high growth food stocks to buy.
In 2024, Restaurant Brands International Inc. (NYSE:QSR) achieved impressive growth, with system-wide sales increasing by 5.4%, while net expansion of restaurants grew by 3.4%. This growth was driven by a strong focus on operational efficiency and menu innovation. Burger King leveraged successful limited-time offerings, and Popeyes continued to expand its value meal options to cater to budget-conscious consumers. Furthermore, Tim Hortons continues to gain momentum in Canada, marking its 15th consecutive quarter of traffic growth, thanks to digital enhancements and faster drive-through services.
However, softening consumer demand in China has posed challenges for Restaurant Brands International Inc. (NYSE:QSR). In response, the company acquired a majority stake in Burger King China for $158 million, aiming to stabilize operations and refine its long-term strategy in the region. Despite the challenges, disciplined cost management has fueled a 9% organic growth in adjusted operating income, resulting in high investor confidence. Moreover, 22 hedge funds held positions in the stock, as per Insider Monkey’s hedge fund database as of Q4 2024, reflecting strong market support.
With a focus on innovation, strategic expansion, and improving franchise profitability, Restaurant Brands International Inc. (NYSE:QSR) is well-positioned for sustained growth and remains a key player in the fast-food industry’s evolving landscape.
Overall, QSR ranks 5th on our list of high growth food stocks to buy. While we acknowledge the potential of QSR as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than QSR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.