QSR vs CAKE: Which consumer stock to explore in Q4?

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 QSR vs CAKE: Which consumer stock to explore in Q4?
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Highlights:

  • Restaurant Brands posted revenue of US$ 1,726 million in Q3 2022.
  • Cheesecake Factory Q3 2022 revenue soared by 3.9 per cent YoY.
  • Restaurant Brands paid a quarterly dividend of US$ 0.54 per share. 

US restaurant stocks may be drawing some attention as the Holiday season approaches. Investors might keep a close watch on the sector to see how these companies may have performed in the recent quarter. Two players in the sector, Restaurant Brands International Inc. (NYSE: QSR) and The Cheesecake Factory Inc. (NASDAQ: CAKE), have already released their Q3 2022 earnings results on November 3 and November 1, respectively.

So, let us look at these two stocks and see how they have fared in the third quarter of the current fiscal:

Restaurant Brands International Inc. (NYSE: QSR)

Restaurant Brands International is a Canadian American fast-food company headquartered in Toronto. The US$ 24.9 billion market cap company is the fifth-largest fast-food giant in the world after McDonald's, Subway, Starbucks, and Yum! Brands.

In its Q3 2022 earnings results, released on Thursday, November 3, Restaurant Brands International reported a revenue of US$ 1,726 million compared to US$ 1,495 million in the year-ago quarter.

Its net income in the reported quarter grew to US$ 530 million versus US$ 329 million in the corresponding quarter in 2021. The diluted earnings per share in Q3 2022 was US$ 1.17, while it was US$ 0.7 in Q3 2021.

The company paid a quarterly dividend of US$ 0.54 per share and its dividend yield was 3.427 per cent at the time of writing.

While the QSR stock declined by over 1.86 per cent year-to-date (YTD), it has climbed over 6.36 per cent over the past month.

QSR vs CAKE: Which consumer stock to explore in Q4?Kalkine Media® / Source: ©Kalkine Media®; © Canva via Canva.com

Cheesecake Factory Inc. (NASDAQ: CAKE)

The Cheesecake Factory Inc. is a US restaurant company that makes and distributes cheesecakes. The Calabasas, California-based company, has a market cap of US$ 1.8 billion. It announced a quarterly dividend of US$ 0.27 per share, which is next payable on November 28, 2022.

Cheesecake Factory reported its Q3 2022 financial results on Tuesday, November 1, posting total revenues of US$ 784 million. It is a 3.9 per cent growth from US$ 754.5 million in Q3 2021.

The company’s Q3 2022 net loss was reported at $2.4 million, while the diluted net loss per share was US$ 0.05.

The company said that its comparable restaurant sales at The Cheesecake Factory restaurants grew 1.1 per cent YoY (year-over-year) in Q3 2022.

While the CAKE stock plunged over 23 per cent YoY, it has ascended close to six per cent since the past month.

Bottom line:

The US equity market is volatile at the moment, impaled by a slew of headwinds ranging from global macroeconomic factors to rising inflation and stringent monetary policies by the Fed Reserve.

So, stock selection during a bearish market is very challenging despite good shows by stocks, as past performances are not a guarantee for future growth. Investors must exercise caution before picking stocks for their portfolios.

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