Q: Hello I have owned QSR for a long time collecting the div and reinvesting I am still a believer in the Patrick Doyle story from when he helped Dominos Pizza. I do like most of their offerings with Firehouse subs and Popeyes quickly popping up everywhere and there is always a line up at Tim's . Do you see value in this name? What is dragging on it if anything. Do you have faith that Patrick Doyle can replicate his past successes.
As always thanks for the great service
As always thanks for the great service
5i Research Answer:
Doyle is hard to beat in terms of an executive in this space but Dominos and QSR are also different businesses in that Dominos is/was largely one brand and one type of food. QSR is multiple brands with different types of foods so whatever the playbook is to get things moving, it will likely have to be different than what worked at Dominos. We think the biggest issue with QSR is just growth. It is a mid-single digit grower at an ok but not 'obviously' cheap valuation (17X fwd PE).