Advertisement
New Zealand markets close in 27 minutes
  • NZX 50

    11,798.65
    -118.13 (-0.99%)
     
  • NZD/USD

    0.5882
    -0.0024 (-0.41%)
     
  • NZD/EUR

    0.5540
    -0.0014 (-0.25%)
     
  • ALL ORDS

    7,845.80
    -163.60 (-2.04%)
     
  • ASX 200

    7,594.70
    -157.80 (-2.04%)
     
  • OIL

    85.92
    +0.51 (+0.60%)
     
  • GOLD

    2,402.60
    +19.60 (+0.82%)
     
  • NASDAQ

    17,706.83
    -296.65 (-1.65%)
     
  • FTSE

    7,965.53
    -30.05 (-0.38%)
     
  • Dow Jones

    37,735.11
    -248.13 (-0.65%)
     
  • DAX

    18,026.58
    +96.26 (+0.54%)
     
  • Hang Seng

    16,279.56
    -320.90 (-1.93%)
     
  • NIKKEI 225

    38,389.85
    -842.95 (-2.15%)
     
  • NZD/JPY

    90.7240
    -0.3030 (-0.33%)
     

Restaurant Brands International Limited Partnership's (TSE:QSP.UN) investors will be pleased with their decent 69% return over the last three years

Buying a low-cost index fund will get you the average market return. But across the board there are plenty of stocks that underperform the market. Unfortunately for shareholders, while the Restaurant Brands International Limited Partnership (TSE:QSP.UN) share price is up 51% in the last three years, that falls short of the market return. Having said that, the 20% increase over the past year is good to see.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

See our latest analysis for Restaurant Brands International Limited Partnership

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

ADVERTISEMENT

Restaurant Brands International Limited Partnership was able to grow its EPS at 15% per year over three years, sending the share price higher. Notably, the 15% average annual share price gain matches up nicely with the EPS growth rate. This suggests that sentiment and expectations have not changed drastically. Au contraire, the share price change has arguably mimicked the EPS growth.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

earnings-per-share-growth
earnings-per-share-growth

This free interactive report on Restaurant Brands International Limited Partnership's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Restaurant Brands International Limited Partnership the TSR over the last 3 years was 69%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

It's nice to see that Restaurant Brands International Limited Partnership shareholders have received a total shareholder return of 25% over the last year. And that does include the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 7% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 4 warning signs for Restaurant Brands International Limited Partnership (3 make us uncomfortable!) that you should be aware of before investing here.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Canadian exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here