Patios Are Opening! Which Stocks Should You Buy?
The Motley Fool
Published Jun 10, 2021 16:45
Updated Jun 10, 2021 17:15
Patios Are Opening! Which Stocks Should You Buy?
The restrictions imposed by governments due to the COVID-19 pandemic have lasted much longer than many people thought they would. For over a year, consumers have had to stay at home and have been unable to enjoy pleasures like dining at their favourite establishments. However, governments are beginning to lessen restrictions.
On June 1, Alberta entered stage one of its summer opening plan, which allows consumers to dine at restaurant patios. Recently, the Ontario government announced that it would be entering step one in its COVID-19 reopening plan. With this in place, Ontario residents will also be able to enjoy patio dining this summer. With all of that in consideration, it seems like stocks that are poised to benefit from these developments would be wise to enter. In this article, I will discuss three top patio stocks.
One of the largest food stocks in Canada Restaurant Brands International (TSX:QSR)(NYSE:QSR) is the parent company of popular restaurants like Tim Hortons, Burger King, and Popeyes. Altogether, its subsidiaries pulled in nearly US$5 billion in revenue last year. Considering these businesses struggled to attract regular amount of customers due to the pandemic, that number should speak to the size of Restaurant Brands. With COVID restrictions lessening, consumers will be able to visit these establishments much more frequently.
Restaurant Brands has performed well this year, gaining more than 14% dividends excluded. Since hitting its lowest point during last year’s market crash, Restaurant Brands stock has gained more than 112%. However, it still trades about 13% lower than where it was pre-pandemic. This means investors can still get in at a discount. The stock’s 3.11% dividend yield may serve as a bonus incentive for curious investors.
Looking for a quick bite? Another company with a large presence in the food industry is MTY Food Group (TSX:MTY). It operates about 80 brands in the quick-service and casual dining industry. Some of MTY’s brands include the popular ManchuWok, Extreme Pita, Mucho Burrito, Baton Rouge, Thai Express, and The Works. In addition to being very diversified in terms of cuisine type, MTY’s business is very geographically diversified. 52% of its locations are in the U.S., 44% are in Canada, and 4% are found internationally.
Like Restaurant Brands, MTY stock has performed well this year, gaining more than 13%. For those keeping track, that’s more than double the annual return of Shopify for this year. As of this writing, MTY stock has reached similar levels to its pre-COVID valuation. As consumers begin to visit these restaurants again, MTY stock could see a massive spike upward.
If you’re looking for a more refined taste… Finally, investors should consider looking at Recipe Unlimited (TSX:RECP). This company operates a portfolio of brands which includes The Keg, East Side Mario’s, Milestones, Montana’s, and Swiss Chalet, among many others. Expectedly, Recipe Unlimited reported that 86% of restaurant operating weeks were affected by government-mandated restrictions in Q1. As a result, the company saw a continued decline in its revenue. However, with patio dining soon to be allowed, investors can expect a move upwards.
Get The App
For the year, this stock has performed the best out of the three stocks mentioned in this article. Recipe Unlimited stock has gained more than 37% since the start of 2021. Since hitting its lowest point during last year’s market crash, the stock has gained over 177%! This is definitely a stock to watch out for, as it isn’t a name often discussed in financial circles.
The post Patios Are Opening! Which Stocks Should You Buy? appeared first on The Motley Fool Canada.
Fool contributor Jed Lloren owns shares of Shopify. The Motley Fool owns shares of and recommends MTY Food Group and Shopify. The Motley Fool recommends RESTAURANT BRANDS INTERNATIONAL INC and recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.
This Article Was First Published on The Motley Fool
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.