Popeyes Louisiana Kitchen is no longer a publicly-traded company. Instead, Popeyes has been a subsidiary of Restaurant Brands International (NYSE: QSR) since 2017. Popeyes traded on the NASDAQ under the ticker symbol PLKI between 2008 and 2017. Popeyes stock was popular with investors because of its high returns.
The truth is, you invest in Popeyes by buying Restaurant Brands International (QSR) stock. Popeyes is a Cajun-themed fast-chain that is popular because of its tasty chicken.
Popeyes Stock Price
Popeyes’ last publicly traded stock price was $79 on March 28, 2017. But to be clear, Popeyes was purchased in its entirety in 2017 by Restaurant Brands International (NYSE: QSR), who saw it as an excellent investment to build out their restaurant portfolio.
Popeyes Stock Symbol PLKI
From 2008 to 2017, Popeyes Louisiana Kitchen stock traded under the stock symbol PLKI. This stock symbol/ticker is no longer on the New York Stock Exchange (NYSE) because it is no longer a publicly-traded entity, having been absorbed into the Restaurant Brands International (NYSE: QSR) family of companies.
Popeyes Chicken Stock History
In the United States, Popeyes is popular because it serves a tastier and more traditional fried chicken menu than rival Kentucky Fried Chicken.
In addition to fried chicken, Popeyes serves some Cajun and Louisiana-style, side dishes including gumbo and rice. Many customers also enjoy Popeyes biscuits.
Popeyes serves shrimp and some other seafood items – which is unusual for an American fast-food chain. Popeyes serves some unusual regional items, including chicken waffle tenders.
Popeyes has many loyal customers because of its unique flavors and better quality food. Popeyes is well-suited to compete in the coronavirus age because most of its food is carryout.
There is no connection between Popeyes and the popular cartoon and comic-strip character Popeye the Sailor. Popeyes operated 3,047 locations worldwide and 2,473 US locations in September 2020. Outside the US, Popeyes operates restaurants in Canada, China, Ukraine, Japan, Saudi Arabia, Mexico, the Philippines, Peru, Honduras, Brazil, Turkey, and Germany.
Al Copeland founded Popeyes in 1972. For many years, Copeland’s company America’s Favorite Chicken owned both Popeyes and Church’s Chicken. They renamed America’s Favorite Chicken Popeyes Louisiana Kitchen for a 2008 initial public offering (IPO).
Restaurant Brands International (NYSE: QSR) paid $79 a share or $1.8 billion for Popeyes Louisiana Kitchen in 2017. Popeyes now operates a subsidiary of Restaurant Brands.
Popeyes Stock Today
Restaurant Brands International is a holding company formed by the 2014 merger between Burger King and Tim Horton’s. Today, Popeyes stock is wholly owned by Restaurant Brands, whose subsidiaries include; Popeyes Louisiana Kitchen, Burger King, and Tim Horton’s.
Burger King is the second-largest hamburger chain in the world. Restaurant Brands claims Burger King operates over 17,800 locations in over 100 countries. Burger King is famous for its flame-broiled burgers and trademark Whopper burger.
Burger King has no corporate-owned restaurant locations. Franchisees own and operate all Burger King locations.
Tim Horton’s is North America’s second-largest coffee-shop chain, after Starbucks (NASDAQ: SBUX). Tim Horton’s is known for donuts, fresh baked goods, sandwiches, soup, and chili. Legendary Canadian hockey player Tim Horton and partner Jim Charade founded Tim Horton’s in Hamilton, Ontario, in 1964.
Restaurant Brands claims Tim Horton’s operates over 4,800 stores in Canada, the United States, and other countries. Tim Hortons is Canada’s largest fast-food chain.
4 Ways To Profit from Popeyes Stock
Restaurant Brands International is the fifth-largest fast-food operator in the world. Restaurant Brands’ headquarters are in Toronto, but Popeyes and Burger King are headquartered in Miami. The Brazilian Investment company 3G Capital owns 51% of Restaurant Brands International.
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1. Invest in Restaurant Brands International (NYSE: QSR) Stock
Restaurant Brands makes some money from its franchises. Restaurant Brands International reported a quarterly gross profit of $574 million, a quarterly operating income of $243 million, and quarterly revenues of $1.048 billion on June 30, 2020.
Coronavirus has hurt Restaurant Brands. The company’s quarterly gross profit fell from $700 million on March 31, 2020. The quarterly operating income fell from $389 million on March 31, 2020, and the quarterly revenues fell from $1.225 billion on March 31, 2020.
Stockrow estimates that Restaurant Brands’ revenue growth fell by -25.14% in the quarter that ended on June 30, 2020. Restaurant Brands’ revenue growth and revenues fell because many people are working from home. Those people are not going out to Popeyes, Tim Horton’s, and Burger King for lunch.
Restaurant Brands’ quarterly operating cash flow fell from $136 million on March 31, 2020, to $60 million on June 30, 2020. Restaurant Brands’ quarterly ending cash flow fell from $2.498 billion on March 31, 2020, to -$958 million on June 30, 2020.
Restaurant Brands had $1.54 billion in cash and short-term investments on June 30, 2020. Restaurant Brands is losing value; its total assets fell from $22.629 billion on March 31, 2020, to $22.016 billion on June 30, 2020.
Value investors like Restaurant Brands because its shares are cheap. Mr. Market paid $57.08 a share for Restaurant Brands International (QSR) on October 22, 2020.
Restaurant Brands International shares paid a 52₵ quarterly dividend on October 2, 2020. Overall, Restaurant Brands offered a $2.08 annual dividend on October 22, 2020.
Restaurant Brands is a cheap stock that pays a dividend. Many will consider Restaurant Brands a value investment because it is an unsexy company with a product that is always in demand – cheap food.
Investors buy Restaurant Brands because they think people are too lazy to cook or lack time to cook. The hope is that harried parents working from home will order a box of Popeyes Chicken and fried shrimp instead of cooking.
2. Invest in Competitor Yum! Brands (NYSE: YUM)
Other companies are poised to cash in on the same trends as Restaurant Brands International (QSR).
Yum Brands! (YUM) operates four fast-food chains. Yum! owns three of the world’s largest and best-known fast-food brands; Kentucky Fried Chicken or KFC, Pizza Hut, and Taco Bell. Yum also owns a newer hamburger chain they call The Habit Burger Grill.
Kentucky Fried Chicken operates over 23,000 restaurants in over 135 countries. Pizza Hut operates over 18,000 pizzerias in over 100 countries. Taco Bell operates 350 franchise organizations and over 7,000 restaurants in almost 30 countries. The Habit Burger Grill operates almost 300 hamburger restaurants in China and the United States.
Yum! Brands do not own the rights to KFC, Taco Bell, and Pizza Hut in China. Another company they call Yum China Holdings (NYSE: YUMC) owns those restaurants.
Yum! Brands are struggling to attract customers in the United States. Many Americans prefer higher quality fast-food, such as Chipotle Mexican Grill (CMG) and Chick-fil-A, to Yum’s products. Both Taco Bell and KFC have reputations selling cheap, low-quality food for working-class people in the United States.
Yum! Brands are trying to capitalize on the quality burger fad with the Habit Burger Grill. Some investors think Yum! is recession-resistant because it operates in many countries.
Yum! Brands make money. Yum reported a quarterly gross profit of $849 million, a quarterly operating income of $300 million, and quarterly revenues of $1.198 billion on June 30, 2020.
Yum! is making less money in the coronavirus pandemic. Yum! Brands’ quarterly revenues fell from $1.263 billion, and Yum’s quarterly gross profits fell from $965 million on March 31, 2020. Yum’s quarterly operating income, however, rose from $250 million on March 31, 2020.
Yum! Brands generate cash from their franchise operations. Yum! Brands reported a quarterly operating cash flow of $124 million and an ending cash flow of $138 million on June 30, 2020.
Yum! Brands’ quarterly ending cash flow fell from $1.31 billion on March 31, 2020, to $138 million on June 30, 2020. Yum Brands! Borrows money to finance its operations. Yum! Brands reported a quarterly financing cash flow of $798 million on March 31, 2020, to $10 million on June 30, 2020.
Value investors examine Yum! Brands, because Mr. Market paid $101.28 for its stock on October 23, 2020. McDonald’s (NYSE: MCD) stock was trading at $228.71 on the same day.
Yum! Brands shares paid a 47₵ dividend on September 11, 2020. Overall, Yum Brands! paid an annual dividend of $1.68 and a dividend yield of 1.7% on October 23, 2020.
3. Invest in Yum China (NYSE: YUMC)
Yum China Holdings Inc. (YUMC) operates KFC, Taco Bell, and Pizza Hut in the People’s Republic of China. Yum China also operates the Little Sheep, East Dawning, CoFFii & Joy, and Huang Ji Huang brands in China.
Yum China operates over 6,700 KFC restaurants in over 1,400 Chinese cities. Yum China also operates over 2,200 Pizza Hut pizzerias in over 500 Chinese cities. Yum China operates 260 Little Sheep hot-pot restaurants in China.
Yum China operates 11 East Dawning traditional Chinese food restaurants, nine Taco Bell locations, and 55 Coffii & Joy coffee shops in China.
Yum China makes money from Chinese fast food. It reported a quarterly gross profit of $441 million, quarterly revenues of $1.902 billion, and a $128 million quarterly operating income on June 30, 2020.
Those numbers grew from $1.754 billion in quarterly revenues, $371 million in quarterly operating revenues, and a $97 million quarterly operating income on March 31, 2020. Many investors will examine Yum China because of its revenues, income, and gross profit growth in a pandemic.
Yum, China is generating more cash. Yum China’s quarterly operating cash flow grew from $60 million on March 31, 2020, to $392 million on June 30, 2020. Yum China’s ending cash flow fell from $1.057 billion on March 31, 2020, to $-376 million on June 30, 2020.
Value investors will examine Yum China because of its lower share price of $54.70 a share in comparison to Yum Brands!’ $101.28 on October 23, 2020. Yum China paid a 12 ₵ quarterly dividend on March 25, 2020.
The value case for Yum China is that it operates thousands of restaurants in a country with the world’s second-largest economy and a $14.4 trillion gross domestic product (GDP) in 2019. China is the world’s fastest-growing economy, with a GDP over of over $1 trillion.
Many investors will buy Yum China to diversify their portfolios outside the USA. Those investors think China’s economy could keep growing if America’s economy shrinks. Yum China is a good way to cash in on China’s growth because there were 1.393 billion Chinese in 2018, and they all eat.
There is a growing middle-class market for fast food in China. McKinsey & Company estimates China’s Middle Class grow to 550 million people by 2022. That means China’s Middle Class could be one and half times larger than the entire US population. The United States had a population of around 331 million in 2020.
Overall, China’s Middle Class grew from 29 million in 1999 to 531 million in 2019, McKinsey & Company estimates. That means 39% of China’s population is now part of the middle class and has money to spend on fast food.
People looking for a fast-food stock that makes money but has enormous growth potential need to examine Yum! China.
4. Invest in Starbucks Corporation (NASDAQ: SBUX)
Starbucks (SBUX) operated 31,256 coffee shops worldwide in 2019, Statista estimates. Starbucks is different from most fast food-brands because it owns a large percentage of its coffee shops.
Starbucks owned all 3,521 of its Chinese coffee shops and 8,591 American locations in 2019, Finances Online estimates. The Starbucks Corporation (SBUX) also owned 1,286 stores in Japan, 1,109 Canadian stores, 653 stores in the United Kingdom, and 352 stores in Thailand in 2019. I estimate the Starbucks Corporation owned 15,4512 stores in 2019.
The advantage of owning the stores is that Starbucks gets all the revenue from those coffee shops. Another advantage is that the Starbucks Corporation can borrow against the shops when it needs cash.
The disadvantage is that Starbucks takes all the risks store ownership creates. Another disadvantage is that Starbucks has to pay the employees and cover all the expenses for the stores.
Owning the stores allows Starbucks to maintain control and enforce high standards of quality and customer service. Firing a lazy or incompetent manager is easy. Getting rid of a bad franchisee can be expensive and difficult.
Starbucks is successful because of the high quality of its coffee. Starbucks is a middle-class brand that prospers in countries with large middle classes. Starbucks’ main markets include China, which had a middle class of 531 million people in 2019.
Starbucks is having a difficult year because coronavirus closes its stores. Starbucks reported a quarterly operating loss of -$703.9 million on June 30, 2020. Starbucks’ quarterly operating income fell from $1.219 billion on December 31, 2019, to $487.40 million on March 31, 2020.
Starbucks has money-making capabilities because it reported a quarterly gross profit of $2.738 billion and quarterly revenues of $4.222 billion on June 30, 2020. Coronavirus could destroy Starbucks because its quarterly operating cash flow fell to -$1.361 billion on March 31, 2020, and -$367.40 million on June 30, 2020.
Starbucks only survived by borrowing enormous amounts of money. Starbucks reported a quarterly financing cash flow of $1.273 billion on March 31, 2020. The quarterly financing cash flow rose to $2.342 billion on June 30, 2020.
The borrowing enabled Starbucks to offer a quarterly ending cash flow of $1.393 billion on June 30, 2020. The ending cash flow rose from -$468.20 million on March 31, 2020.
Starbucks is a cash-rich company with $4.195 billion in cash and short-term investments on June 30, 2020. Starbucks’ cash and short-term investments grew from $2.625 billion on March 31, 2020.
The value of Starbucks’ total assets grew from $27.420 billion on March 31, 2020, to $29.141 billion on June 30, 2020. I view Starbucks as a value investment because it has enormous amounts of cash and assets but a modest share price of $90.80 on October 23, 2020.
Starbucks will pay a 45₵ quarterly dividend on November 10, 2020. The dividend makes Starbucks a good stock because it has a high margin of safety.
Starbucks is a good company because it has diversified operations in several countries. Starbucks is a diversified investment because it has large footprints in both China and the United States. Starbucks can make money if China grows, but it can also profit from an American renaissance.
Starbucks’ risk is that its coffee shops need many people working away from home to make money. When many people work from home, they make coffee, which limits Starbucks’ customer base.
Starbucks can adapt to this situation by adding drive-through facilities to its restaurants and offering delivery. Such changes will be expensive. One way for Starbucks to adapt is to offer its coffee through grocery delivery services such as Instagram. Another is to combine the delivery of its coffee with food from other restaurants such as McDonald’s (MCD).
The problem at Starbucks is that it concentrates on one area of the quick-service sector. That leaves Starbucks vulnerable to catastrophes such as coronavirus.
The Future of Fast Food
Diversified fast-food operators such as Restaurant Brands International (QSR), Yum! Brands (YUM) and Yum China (YUMC) are safer from disasters such as coronavirus. Restaurant Brands can survive coronavirus by selling Popeyes’ takeout or direct delivery if sales at Burger King or Tim Horton’s collapse.
One way for Restaurant Brands to prosper during a pandemic is to offer a combined deal that includes Popeyes chicken and Tim Horton’s coffee. Restaurant Brands could organize such a deal by buying a food delivery service such as Grubhub (NYSE: GRUB).
Fast food and quick-service restaurant stocks are still good investments. The market for fast-food is growing, but it is undergoing enormous changes. Investors need to understand that some fast-food restaurants will collapse while others change.
Fast food is a money-making sector investors need to be careful with.
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