Should you invest $1,000 in Blue Ribbon Income Fund right now?

Before you buy stock in Blue Ribbon Income Fund, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Blue Ribbon Income Fund wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $18,750.10!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 35 percentage points since 2013*.

See the Top Stocks * Returns as of 1/22/25

Tim Hortons: The Good, the Bad, and the Ugly

None of what’s going on at Restaurant Brands International Inc.’s (TSX:QSR)(NYSE:QSR) coffee franchise is hurting its stock price, suggesting it’s untouchable.

| More on:

After spending the better part of a year criticizing Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR) on how it runs its business, a trio of recent news stories about Tim Hortons has me throwing in the towel.

I officially surrender my bully pulpit, because it’s clear from its share price — up 22% in the past three months — that Restaurant Brands can do no wrong in the eyes of investors.

Whether we’re talking a good, bad, or ugly story about the Tim Hortons franchise, investors see a positive long-term outcome for the 3G Capital-backed restaurant operator; the one thing I’ve learned about investing is you can’t fight the trend.

The good

Tim Hortons announced July 11 that it’s about to take some of the spotlight away from Starbucks Corporation in China, opening 1,500 stores in the country over the next decade, which works out to three coffee shops a week.

That’s a lot of construction.

Leaning on its iconic Canadian identity, Tim Hortons looks to take advantage of the growth in the coffee culture in China. Currently, Starbucks has 3,300 stores in the country with an additional 2,700 to be added over the next four years.

“One of the things that makes us different from any other competitor is we have Canada in our brand,” Tim Hortons president Alex Macedo said in an interview. “We think that the Tims brand and our products can travel all over the world.”

Roots Corp. has done well in Asia with its obvious Canadian branding, so it’s possible this will also work for Tim Hortons.

Fool contributor Demetris Afxentiou recently discussed how Restaurant Brands’s experience opening Burger King in China should help it get to 1,500 Tim Hortons locations relatively smoothly.

This, perhaps more than its Canadian identity, will help Tim Hortons be successful in China. That said, I have to wonder about going up against Starbucks, which has staked its future on the country.

I guess time will tell, but it’s hard to deny this is a good story for the brand.

The bad

On July 17, Restaurant Brands announced that it would review its no-poaching clause in its franchise agreements that prohibit them from hiring employees from other franchises.

A 2017 academic paper from two Princeton University professors found that 58% of franchises in the U.S. with more than 500 restaurants used this clause to tamp down wages, despite a very robust economy.

Interestingly, Tim Hortons’s U.S. competitor Dunkin Brands Group Inc. dropped the no-poaching clause at its franchises (it also operates Baskin-Robbins) more than 15 years ago.

Frankly, I don’t need a university academic paper to tell me that’s not a good thing for employees. As far as I’m aware, very few non-recruit clauses are enforceable in either the U.S. or Canada.

If Tim Hortons is smart, it’ll drop the clause like a hot potato.

The ugly

Despite Restaurant Brands looking to play nice with franchisees, it continues to play hardball with Mark Kuzoria, a former franchisee whose franchise was taken back by the company for alleged food safety violations and failure to comply with the company’s operating standards.

Kuzoria, who is active in the Great White North Franchisee Association’s fight with the company over its frugal business practices, is suing the company, alleging that it’s decision to not renew his licence had everything to do with the GWNA’s vocal criticism of the company and not his personal operating standards.

The so-called dissident franchise group was planning a June 20th protest at Restaurant Brands’s headquarters in Oakville but opted to postpone it until a later date.

Optically, the longer this dispute carries on, the bigger the hit to its reputation. That said, I’m not sure anything can put a dent in QSR stock at this point.

The bottom line

Less than a week ago, I said Restaurant Brands wouldn’t hit $100 in 2018 because of its level of debt and over-reliance on Burger King. Now, I’m not so sure.

Good, bad, or ugly, Restaurant Brands’s momentum appears unstoppable. I wouldn’t buy its stock, but that doesn’t mean you shouldn’t.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Will Ashworth has no position in any stocks mentioned. David Gardner owns shares of Starbucks. Tom Gardner owns shares of Starbucks. The Motley Fool owns shares of RESTAURANT BRANDS INTERNATIONAL INC and Starbucks. Starbucks is a recommendation of Stock Advisor Canada.

More on Investing

ways to boost income
Dividend Stocks

2 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

Given their solid underlying businesses and healthy growth prospects, these two high-yielding dividend stocks are excellent additions to your portfolios.

Read more »

Circuit board with glowing lines
Tech Stocks

Constellation Software: Buy, Sell, or Hold in 2025?

Constellation Software (TSX:CSU) has done a lot of growth over the years but is also pricey.

Read more »

golden sunset in crude oil refinery with pipeline system
Energy Stocks

Got $1,000? 3 Pipeline Stocks to Buy and Hold Forever

Three high-yield TSX pipeline stocks are ideal for long-term and income-focused investors.

Read more »

hand stacking money coins
Stock Market

The Smartest Growth Stock to Buy With $1,000 Right Now

Some of the smartest growth stocks to buy are those with a great record of performance. Here are three Canadian…

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Wednesday, February 19

In addition to the FOMC’s latest meeting minutes, TSX investors will closely monitor more corporate results today as earnings season…

Read more »

Hand Protecting Senior Couple
Retirement

Retirees: Worried About CPP and OAS? Protect it With These 2 Stocks

These two stocks can help as OAS and CPP continue to change, with retirees needing more cash than ever to…

Read more »

Person uses a tablet in a blurred warehouse as background
Tech Stocks

Should You Buy Kinaxis Stock While It’s Below $170?

Kinaxis stock has gone through some hiccoughs, but don't let that keep you from missing out on one amazing deal.

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

3 Top Information Technology Sector Stocks for Canadian Investors in 2025

Canadian investors can choose from 3 top TSX IT stocks that can deliver enormous returns in 2025.

Read more »