Restaurant Brands International (NYSE:QSR) Will Pay A Larger Dividend Than Last Year At $0.58
Restaurant Brands International Inc. (NYSE:QSR) will increase its dividend from last year's comparable payment on the 4th of April to $0.58. This makes the dividend yield 3.0%, which is above the industry average.
Check out our latest analysis for Restaurant Brands International
Restaurant Brands International's Earnings Easily Cover The Distributions
If the payments aren't sustainable, a high yield for a few years won't matter that much. Restaurant Brands International was earning enough to cover the previous dividend, but it was paying out quite a large proportion of its free cash flows. By paying out so much of its cash flows, this could indicate that the company has limited opportunities for investment and growth.
Over the next year, EPS is forecast to expand by 41.0%. If the dividend continues along recent trends, we estimate the payout ratio will be 50%, which is in the range that makes us comfortable with the sustainability of the dividend.
Restaurant Brands International Is Still Building Its Track Record
Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. Since 2015, the annual payment back then was $0.36, compared to the most recent full-year payment of $2.32. This means that it has been growing its distributions at 23% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
We Could See Restaurant Brands International's Dividend Growing
The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Restaurant Brands International has been growing its earnings per share at 9.1% a year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.
Our Thoughts On Restaurant Brands International's Dividend
In summary, while it's always good to see the dividend being raised, we don't think Restaurant Brands International's payments are rock solid. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments Restaurant Brands International has been making. We don't think Restaurant Brands International is a great stock to add to your portfolio if income is your focus.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. To that end, Restaurant Brands International has 3 warning signs (and 1 which is potentially serious) we think you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
