Get Rich Slowly: A Stellar Growth Stock to Buy Right Now, Even in the Face of a Worsening Pandemic

Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR) is the perfect value stock that can help you get rich slowly through and after this crisis.

| More on:

Many beginner investors desire to get rich quickly. The pursuit of near-term gains at the expense of downside risks can be harmful to your wealth, though, as it often leads newbies towards speculating and playing the game of greater fools (based on the greater fool theory). If you don’t have a sound fundamental thesis and are just chasing sheer momentum, that’s not investing. It’s speculating.

Unrealistic expectations lead one down the path of the speculator. Speculation may result in a euphoric rush from near-term upward price movements sooner or later. Heck, it may even be fun. Sooner or later, one could be left holding the bag for the hundreds of other speculators that have chosen to cash in their chips before the rest of the herd.

To get rich slowly, don’t set unrealistic expectations!

If you want to invest and not gamble, curb your return expectations. Seek to get rich, but seek to get rich within a reasonable time frame, so you won’t be forced to gamble with your hard-earned investment dollars to hit your annualized return goals. You should seek to get rich slowly. The slower, the better.

For beginner investors, I like to take a page of Charlie Munger’s playbook with a “sit on your bum” approach to investing. Once you find an opportunity to pay for an unfairly discounted stock, you’ll need the patience, conviction, and time horizon to hold onto the stock until the market has had a chance to “correct” its mistake to the upside. Like downside corrections, upside corrections tend to go unrecognized anywhere from a few months to many years.

If you’re willing to put in the homework by conducting a careful analysis of a company and its financials, you should also be willing to hold onto the name until the correction to the upside comes to fruition. Some stocks are more challenging to value than others, as exogenous factors and the macro environment can drastically alter an investment thesis.

A fast-food kingpin that’s undervalued if you can look past 2021

Consider Restaurant Brands International (TSX:QSR)(NYSE:QSR), the fast-food kingpin behind Tim Hortons, Popeyes, and Burger King. Shares of the name fell off a cliff back in February and March, as the coronavirus crisis stood to decimate the operating cash flow stream of restaurants amid full and partial economic shutdowns.

As expected, Restaurant Brands saw its revenues take a hit to the chin due to the crisis. Dining room closures and an increased appetite for homemade meals weighed on Restaurant Brands’s results, and they’ll probably continue to do so for the duration of this crisis, as dining rooms could flip-flop between opening and closing depending on the severity of outbreaks in specific geographies.

As long as the insidious coronavirus is still lingering out there, Restaurant Brands, a profitable, capital-light growth business, remains tough to value. While the crisis could drag on through 2021 and beyond, I think the near-term headwinds are clouding the long-term fundamentals, which remain as strong as ever.

Foolish takeaway on Restaurant Brands and getting rich slowly

For those willing to pay less merit on the pandemic-plagued medium term, I believe there’s significant upside for contrarians willing to stand by Restaurant Brands, as it looks to heal from this crisis. Once the broader masses are vaccinated, I not only suspect revenues will bounce back in a V-shaped fashion for Restaurant Brands, but the recessionary environment is likely to fuel an increased appetite for low-cost, fast-food options, and that bodes well for the firm’s top line.

With a solid balance sheet, Restaurant Brands will live to see better days. The same can’t be said about many of its small non-franchised peers that have already begun to fall under profound financial distress.

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 Joey Frenette owns shares of RESTAURANT BRANDS INTERNATIONAL INC. The Motley Fool recommends RESTAURANT BRANDS INTERNATIONAL INC.

More on Dividend Stocks

Canadian dollars in a magnifying glass
Dividend Stocks

Here Are My Top 3 Dividend Stocks to Buy Now

These top dividends stocks have consistently paid and increased their dividends. Further, this trend will continue.

Read more »

dividends can compound over time
Dividend Stocks

Want a 7% Yield? The 3 TSX Stocks to Buy Today

These TSX stocks are offering high yields of over 7%, making them attractive for investors seeking steady passive income.

Read more »

how to save money
Dividend Stocks

The Smartest Dividend Stocks to Buy With $200 Right Now

These smartest dividend stocks can consistently pay and increase their dividends in the coming years, irrespective of the macro uncertainty.

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

3 Utility Stocks That Are Smart Buys for Canadians in November

These utility stocks benefit from regulated businesses and generate predictable cash flows that support higher dividend payouts.

Read more »

Start line on the highway
Dividend Stocks

Invest $10,000 in This Dividend Stock for $600 in Passive Income

Do you want to generate passive income? Forget the rental unit! This option will save you the mortgage yet still…

Read more »

Senior uses a laptop computer
Dividend Stocks

1 Reliable Dividend Stock for the Ultimate Retirement Income Stream

TD Bank (TSX:TD) shares are way too cheap with way too swollen a yield for retirees to pass up right…

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

Is Brookfield Infrastructure Partners a Buy for its 4.75% Yield?

Brookfield Infrastructure Partners (BIP) has a 4.75% dividend yield. Is it worth it?

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »