Based on Restaurant Brands' profitability indicators, Restaurant Brands International may not be well positioned to generate adequate gross income at the present time. It has a very high chance of underperforming in January. Profitability indicators assess Restaurant Brands' ability to earn profits and add value for shareholders.
For Restaurant Brands profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Restaurant Brands to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Restaurant Brands International utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Restaurant Brands's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Restaurant Brands International over time as well as its relative position and ranking within its peers.
Please note, there is a significant difference between Restaurant Brands' value and its price as these two are different measures arrived at by different means. Investors typically determine if Restaurant Brands is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Restaurant Brands' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
Restaurant Brands Operating Margin vs. Profit Margin Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Restaurant Brands's current stock value. Our valuation model uses many indicators to compare Restaurant Brands value to that of its competitors to determine the firm's financial worth.
Restaurant Brands International is currently regarded as top stock in profit margin category among its peers. It also is currently regarded as top stock in operating margin category among its peers reporting about 1.20 of Operating Margin per Profit Margin. At present, Restaurant Brands' Net Profit Margin is projected to increase slightly based on the last few years of reporting. Comparative valuation analysis is a catch-all model that can be used if you cannot value Restaurant Brands by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Restaurant Brands' Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued.
Restaurant Operating Margin vs. Profit Margin
Profit Margin measures overall efficiency of a company and shows its ability to withstand competition as well as defend against adverse conditions such as rising costs, falling prices, decline in sales or management distress. Profit margin tells investors how well the company executes on its overall pricing strategies as well as how effective the company in controlling its costs.
Restaurant Brands
Profit Margin
=
Net Income
Revenue
X
100
=
0.23 %
In a nutshell, Profit Margin indicator shows the amount of money the company makes from total sales or revenue. It can provide a good insight into companies in the same sector, as well as help to identify trends of a company from year to year.
Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.
Restaurant Brands
Operating Margin
=
Operating Income
Revenue
X
100
=
0.27 %
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.
Restaurant Operating Margin Comparison
Restaurant Brands is currently under evaluation in operating margin category among its peers.
Restaurant Brands Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Restaurant Brands, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Restaurant Brands will eventually generate negative long term returns. The profitability progress is the general direction of Restaurant Brands' change in net profit over the period of time. It can combine multiple indicators of Restaurant Brands, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Profitability drivers are factors that can directly affect your investment outlook on Restaurant Brands. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Restaurant Brands position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Restaurant Brands' important profitability drivers and their relationship over time.
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Restaurant Brands position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Restaurant Brands will appreciate offsetting losses from the drop in the long position's value.
Restaurant Brands Pair Trading
Restaurant Brands International Pair Trading Analysis
The ability to find closely correlated positions to Restaurant Brands could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Restaurant Brands when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Restaurant Brands - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Restaurant Brands International to buy it.
The correlation of Restaurant Brands is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Restaurant Brands moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Restaurant Brands moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Restaurant Brands can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Use Investing Themes to Complement your Restaurant Brands position
In addition to having Restaurant Brands in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.
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Run Railroads Thematic Idea Now
Railroads
Companies involved in manufacturing and maintenance of freight railroads and passenger trains as well as providing railroad services to public. The Railroads theme has 46 constituents at this time.
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When determining whether Restaurant Brands is a strong investment it is important to analyze Restaurant Brands' competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Restaurant Brands' future performance. For an informed investment choice regarding Restaurant Stock, refer to the following important reports:
You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
To fully project Restaurant Brands' future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Restaurant Brands at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Restaurant Brands' income statement, its balance sheet, and the statement of cash flows.
Potential Restaurant Brands investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Restaurant Brands investors may work on each financial statement separately, they are all related. The changes in Restaurant Brands's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Restaurant Brands's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.
