So far as blue-chip Canadian shares traders might have a look at proper now and deem a “screaming purchase,” I’d say Restaurant Manufacturers (TSX:QSR) needs to be within the dialogue for many traders.

It is a firm with a extremely defensive enterprise mannequin that’s seeing a surge of curiosity from billionaire hedge fund managers. Certainly, when the sensible cash is shifting into a comparatively neglected identify, that’s an excellent signal.

Listed here are three of the highest the reason why I feel Restaurant Manufacturers is lastly getting the eye it deserves, and the place this prime quick meals big might be headed from right here.

Stable earnings driving spectacular returns

System-wide gross sales development throughout the corporate’s portfolio of quick meals banners noticed strong momentum this previous quarter. Restaurant Manufacturers noticed 6.9% year-over-year development general, with 4% comparable gross sales development over the identical interval. These are sturdy numbers for a corporation with very established places in principally developed markets.

Importantly, sturdy returns from the corporate’s international enterprise (ex-North America) drove most of those returns. Development coming from markets in Western Europe, China and Japan drove 12% system-wide gross sales development, and that is the important thing space I feel traders will proceed to give attention to.

Sturdy earnings and money circulate prospects

This development has bled into sturdy bottom-line fundamentals, with Restaurant Manufacturers sustaining a free money circulate margin round 25% this previous quarter. With these sorts of margins, the corporate has loads of room to proceed returning capital to shareholders through dividend and buybacks, which the corporate intends on doing.

Certainly, Restaurant Manufacturers stays a prime dividend inventory decide of mine, with its 3.6% dividend yield bolstered by sturdy development prospects down the road. With strong margins and money flows supporting monetary flexibility and the potential for future dividend hikes, there’s quite a bit to love about this firm’s capital appreciation and complete return profile over the long run.

Outlook stays promising

Whereas different firms might even see a deteriorating outlook within the context of a shopper that seems to be buying and selling down, firms like Restaurant Manufacturers are within the driver’s seat to learn from these macro shifts.

Certainly, the corporate’s standing as a lower-cost possibility for these trying to dine out, in addition to the model loyalty Restaurant Manufacturers has been in a position to generate over time, may drive outsized returns relative to its friends within the months and quarters to return.

For traders on the lookout for a long-term inventory to think about including on this present surroundings, Restaurant Manufacturers stays one in every of my prime picks proper now. This inventory seems to be very enticing on a relative foundation, and I’ll proceed to pound the desk on this identify till one thing materials modifications with its thesis.