Tim Hortons Inc. (USA) (THI), Dunkin Brands Group Inc (DNKN), Starbucks Corporation (SBUX): A Restaurant That Offers Resiliency and Growth Potential

Page 2 of 2

It should also be noted that Tim Hortons sports an impressive ROE of 35.25%, versus 28.74% and 22.97% for Starbucks Corporation (NASDAQ:SBUX) and Dunkin Brands Group Inc (NASDAQ:DNKN), respectively. While all three companies are good at turning investor dollars into profits, Tim Hortons is the most efficient in this area, and that’s saying a lot.

Another interesting note is that Tim Hortons’ share price performance proved to be more resilient than Starbucks Corporation (NASDAQ:SBUX) in 2008/2009, which was directly related to Tim Hortons being Canadian-focused, meaning it had limited exposure to the financial crisis in the United States. The chart below shows this, and a similar pattern could play out if the U.S. were to have a similar economic calamity.

THI Chart

Tim Hortons data by YCharts

Conclusion

Like most restaurants, Tim Hortons is dealing with some significant headwinds, including a weak consumer and attempting to establish its presence in a highly competitive American market. However, Tim Hortons has been a long-term winner, it’s a shareholder-friendly company, and since it caters to the value consumer as well as the consumer on the go (which is always in demand), the stock is likely to be relatively resilient to any market downside. And if the market holds up, then you should have a sure winner on your hands as Tim Hortons heads south of the border.

The article A Restaurant That Offers Resiliency and Growth Potential originally appeared on Fool.com and is written by Dan Moskowitz.

Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends Starbucks. The Motley Fool owns shares of Starbucks.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Page 2 of 2