You’re here because you and I both want to get in on Subways stock price. Like me, you are probably looking to take a bite out of the foot long giant Sandwich maker. Seeing as it is one of the biggest fast-food companies in the world-they have over 26,000 restaurants in the US and 44,000 locations worldwide. Getting in on Subway stock is every investor’s dream. Except for one thing.
Subway is a privately owned restaurant chain and isn’t listed on any stock exchange. Which means you couldn’t buy stock in Subway even if you wanted to. So no, there is no subway stock price. But we will talk about some healthy alternatives to consider for investing below.
Chart by TradingView.
Subway is owned by a private company by the same of Doctor’s Associates. They are not a publicly trading company on a major stock exchange. As a result, you can’t buy Subway stock but you can invest in large restaurant companies.
The Founding Of Subway
In 1965, Fred DeLuca borrowed a few thousand dollars from his friend Pete Buck and opened a small restaurant called Pete’s Super Submarines.
Just a year later, their organization, Doctors Associates, was founded. And, the expansion began.
Just a short three years later, they renamed the restaurants “Subway.” Fast forward to 1982, and the sub making machine snowballed to 200 franchises with a global footprint
One interesting point to note about Subway is that their parent company Doctors Associates Inc does not own a single Subway restaurant.
Yes, you read that right. Every single one of the restaurants is independently owned and operated. In turn, the owners pay out about 8% of their revenue to the company, along with a 4.5% advertising fee. Not bad.
That being said, individual Subway restaurants pull in, on average, about 500,000 dollars a year. So, even though you can’t buy Subway stock, restaurant owners do make a healthy income through their investment in the franchise. So, if you can’t buy shares…maybe you want to open a shop? On all fronts, both by revenue and reputation, the company has done well for itself. In fact, rankings of the top franchise opportunities in the US consistently rate Subway as number one.
One statistic that may surprise you: They are the largest fast-food chain worldwide. They top even McDonald’s in the number of restaurant locations. This must be because they have smaller square foot requirements, along with needing less staff, and less overhead in general.
Oh, and they generate an estimated $17 billion in revenue each year. Not too shabby for a lettuce, tomato and bread operation.
Is Subway a Publicly Traded Company?
No Subway is not a publicly traded company. Unfortunately there is no Subway Stock Price. They are a privately owned company with a lot of franchises. 21,000 to be exact. They’re in 100 countries all over the world.
How To Invest In A Fast Food Giant
Like I mentioned above, since Subway’s owned by a private company (Doctor’s Associates), you can’t buy stock in Subway itself.
But there is a silver lining to this cloud: You can invest in other large restaurant companies. Because at the end of the day, we all know the fast food industry isn’t going away any time soon. B
Below I’m going to show you one alternative investment opportunity within the fast-food sector that may be a good fit for your portfolio.
A Golden Opportunity
Have you heard of Restaurant Brands International (NYSE:QSR)? Restaurant Brands International owns two of the world’s most prominent and iconic quick-service restaurant brands – Tim Hortons® and Burger King®.
Formed in 2014 by the $12.5 billion merger between Burger King and Tim Hortons, RBI is a powerhouse. They are also the owner of Popeye’s and the fifth-largest operator of fast-food restaurants in the world. Remember how crazy people were going for those chicken sandwiches in 2019? Altogether, the company has a staggering 23,000 locations worldwide across its portfolio.
Restaurant Brands International
There’s a few reasons why one would opt for stock in Restaurant Brands. Firstly, the companies in the RBI umbrella have been in existence for over 150 years combined. Proving to withstand the test of time.
And it’s that track record of success in all economic climates that make it an attractive, fast food investment alternative to buying subway stock.
The consolidation of Burger King, Tim Hortons, and Popeyes Louisiana Kitchen as Restaurant Brands International creates the 3rd largest global quick-service restaurant chain, with $34 billion in pro forma system sales generated in 2019 and almost 27,100 units (99% franchised) as of December 2019. The revenue here comes mostly from franchise royalties and distribution sales to franchisees. Worldwide, there are 18,800 Burger King locations, more than 4,900 Tim Hortons locations, and 3,300 Popeyes locations.
QSR Stock Rover Report 5/23.
They have a long track record of charity and giving back to the communities that they serve. For example, the Tim Horton’s Children’s Foundation has provided resources to tens of thousands of youth who are in need throughout Canada.
Thirdly, their future looks bright. Just last year, sales grew to over 8%, thanks to a higher net restaurant count – it’s up 5.2% -and consolidated higher comparable sales.
Fourthly, Restaurant Brands is a cash cow that generates stable cash flow to protect its dividend. Since 2015, they have more than tripled their dividend from US$0.62 to US$2.08 per share! What’s more, their 2019 payout ratio was 64% of free cash flow.
Last but not least, at the end of 2019, Buffett held more than US$468 million worth of stock in Restaurant Brands.
Chipotle Stock Good Buy or Good Bye?
$CMG is a bit of a force of nature. With $5.6 billion in sales during 2019, this delicious restaurant chain is the largest player in the $16 billion domestic fast-casual Mexican restaurant category.
$CMG has some impressive stats. As of April 2020, it has a large % margin of safety as its trading well below fair value. Data provided by Stock Rover.
Chipotle is known for higher-quality ingredients than those typically found at quick-service restaurants.They tend to be picky about their ingredients, and its paid off in a major way. As of December, the burrito king operated more than 2,600 company-owned restaurants in the United States, Canada, the United Kingdom, France, and Germany. Analysts currently in 2020 rate $CMG a buy.
The Bottom Line
Even though you can’t buy Subway stock, you should consider buying stuck in Restaurant Brands stock, or even $CMG. With the market correction in early 2020, Restaurant Brands is a bargain hunter’s dream stock.
As the fifth-largest publicly listed North American fast-food business, Restaurant Brands is great value for money right now. Currently, they’re offering a 3.8% yield, and analysts have a 12-month price target that’s 43% higher!
Given the fact that they are down a decent amount, snapping up discounted shares is a strong play right now.
