The Top Restaurant Stocks in Canada for February 2025

Key takeaways

More and more consumers are looking for quicker, but healthier ways to eat. Quick services restaurants will need to adapt.

The landscape of quick-service and restaurant stocks is changing as food prices are materially higher than pre-pandemic.

Most restaurant stocks here in Canada focus on returning profits back to shareholders

3 stocks I like better than the ones on this list.

The fast food industry is continually growing here in Canada. Consumers love to dine out, whether it be in a restaurant or at their favorite burger joint.

These businesses, particularly the ones that focus on quick-service restaurants, are somewhat recession-proof. As times get more difficult, when consumers choose to eat out, they gravitate towards fast food joints.

As a result, these Canadian stocks can be a stable, defensive option for Canadian investors.

Most of the ones trading on the Toronto Stock Exchange pay dividends, and the royalty structure of a few of these Canadian restaurants we go over in this article is specifically designed to return the vast majority of their income to investors via a distribution.

With that said, let’s dive into the best restaurant stocks in Canada to own today.

What are the top restaurant stocks in Canada?

Canada’s Largest QSR Company

Restaurant Brands International (TSE:QSR)

Restaurant Brands International is one of the largest restaurant companies in the world, with over $40B in systemwide sales across a footprint that spanned more than 30,000 restaurants and more than 100 countries. The firm generates revenue primarily from retail sales at its company-owned restaurants, royalty fees and lease income from franchised stores, and from its Tim Hortons supply chain operations. Formed in 2014 after 3G Capital’s acquisition of Tim Hortons International, the RBI portfolio is split among Burger King, Tim Hortons, Popeyes Louisiana Kitchen, Firehouse Subs, and international franchise units of those banners

P/E: 16.1

5 Yr Revenue Growth: 6.4%

5 Yr Earnings Growth: 10.1%

5 Yr Dividend Growth: 4.9%

Yield: 3.7%

  • Owns iconic fast-food chains like Burger King, Tim Hortons, Popeyes, and Firehouse Subs, providing wide consumer appeal.
  • Highly franchised business (over 90% franchised), reducing operational risk and capital requirements while generating stable, recurring revenue streams.
  • Aggressive global expansion, particularly in emerging markets like India, China, and Latin America, leveraging a strong brand and growing middle-class demand.
  • Offers a reliable and growing dividend supported by stable cash flows and a resilient business model.
  • Backed by 3G Capital, known for its expertise in cost management, M&A, and strategic growth initiatives.
  • Positioned to pursue additional acquisitions, leveraging a successful track record of integrating new brands into its portfolio.
  • Digital transformation and delivery growth. The quick-service restaurant (QSR) industry is rapidly shifting toward digital channels. RBI’s ability to enhance mobile ordering, loyalty programs, and third-party delivery partnerships will be key to continue growing customer engagement and sales.
  • International expansion. Markets like India, China, and Latin America present massive growth opportunities due to rising disposable incomes and increasing demand for Western QSR brands. Success in these regions is key for RBI’s long-term revenue growth.
  • Consumer tastes and dietary preferences are evolving rapidly. RBI’s ability to stay ahead of food trends while maintaining the appeal of its core menu is crucial.
  • Franchisee health. RBI’s heavily franchised business model relies on the financial health and operational performance of its franchisees. Strained relationships, franchisee bankruptcies, or inability to invest in required upgrades could hurt system-wide growth.
  • Competition. The quick-service restaurant space is highly competitive, with major players like McDonald’s, Wendy’s, and Yum! Brands constantly innovating and fighting for market share.
  • Macroeconomic conditions. While QSRs are relatively recession-proof, factors like inflation, labor shortages, and rising commodity costs can significantly impact RBI’s franchisees and thus the company.

Canada’s Fastest Growing Burger Joint

A&W Food Services (AW.TO)

A&W Food Services of Canada Inc is a burger QSR chain in Canada. Its A&W restaurants feature trade-marked menu items such as The Burger Family, Chubby Chicken, and A&W Root Beer. The company was formerly an income fund, but the two companies merged to create a quick-service restaurant corporation structured similarly to QSR in order to give investors exposure to the bottom line profits of the business instead of just the top line revenue.

Because of the new corporation and its short publicly-traded life, we don’t have any scoring data or metrics on the company.

P/E: N/A

5 Yr Revenue Growth: N/A

5 Yr Earnings Growth: N/A

5 Yr Dividend Growth: N/A

Yield: N/A

  • A&W is one of Canada’s most recognizable quick-service restaurant (QSR) chains, appealing to a broad demographic with its focus on quality and sustainability.
  • A&W is known for catering to health-conscious consumers, offering hormone- and steroid-free meats, plant-based options, and an environmentally friendly image, positioning it well for shifting consumer preferences.
  • Its focus on QSR, which tends to perform well during economic downturns, provides defensive characteristics for investors.
  • The company’s new structure allows investors to benefit from the earnings growth of the underlying franchises instead of its older model, which would have been a royalty fund in which investors got a distribution based on top-line revenue generation.
  • The company is one of the faster growing quick-service restaurants in the country, at least from a burger standpoint.
  • Same Store Sales Growth. System sales directly impact revenue. Monitoring SSSG is crucial to assessing A&W’s ability to drive organic growth through higher traffic and average ticket size.
  • Consumer health trends. A&W’s focus on hormone-free meats, plant-based options (e.g., Beyond Meat burgers), and environmentally friendly packaging aligns with growing consumer preferences for sustainable and ethical choices. Continued innovation in this space is key to maintaining a competitive edge, as its options are certainly more expensive than other QSRs.
  • Expansion across Canada. While A&W has a strong presence in Western Canada and smaller towns, its ability to expand further into urban centers and Eastern Canada will drive incremental sales growth.
  • Franchisee health. The fund relies on franchisees for operations, and rising costs (e.g., labor, rent, and food inflation) could strain franchisees’ profitability, leading to closures or reduced expansion.
  • Intense competition. A&W faces competition from national and global chains like McDonald’s, Tim Hortons, and Wendy’s. Failure to keep pace in menu innovation, pricing, or promotions could result in lost market share.
  • Reliance on Canada. A&W’s revenue is entirely dependent on the Canadian market, making it vulnerable to economic or demographic shifts within the country. The company does have US exposure, however those restaurants are not included in this fund. That is an important factor to note.
  • A newly listed corporation. A&W used to be an income fund with a reliable history of results. However, now investors are exposed to the entirety of the business, including input costs of the restaurants themselves. This is likely a more lucrative business, but one that is higher risk.

Canada’s Most Diverse QSR

MTY Food Group (TSE:MTY)

MTY Food Group Inc is a franchisor in the quick service and casual dining food industry. Its activities consist of franchising and operating corporate-owned locations as well as the sale of retail products under a multitude of banners. The company’s operating segment is based on geographical regions namely Canada; and U.S. and International, which earns maximum revenue. The company brands include Cafe Depot, Country Style, Croissant Plus, Cultures, Extremepita, Fabrika, Jus Jugo Juice, Koya Japan, ManchuWok, Muffin plus, Valentine, Van Houtte, Shushiman and others.

P/E: 11.5

5 Yr Revenue Growth: 23.2%

5 Yr Earnings Growth: 1.5%

5 Yr Dividend Growth: 10.8%

Yield: 2.5%

  • MTY owns over 80 brands across quick-service, casual dining, and takeout, including names like Thai Express, Pizza Delight, and Cold Stone Creamery. This diversification reduces reliance on any single brand or segment.
  • MTY primarily operates through franchising, providing stable royalty income while minimizing operational risks and capital expenditure.
  • MTY has a proven track record of acquiring and integrating brands, driving growth through accretive M&A and unlocking value in underperforming assets.
  • The company operates in Canada, the U.S., and internationally, providing exposure to multiple markets and reducing dependence on any one region.
  • Mergers and Acquisitions. M&A is MTY’s core growth driver. The company’s ability to identify, acquire, and integrate brands effectively will determine its long-term growth trajectory.
  • Franchisee performance. MTY depends on franchisees for revenue generation and growth. Franchisee profitability impacts the company’s ability to expand its footprint and retain operators.
  • Retail popularity. MTY has historically had a significant presence in retail malls, particularly in food courts. This focus has been a core part of its business strategy due to the high foot traffic and convenience that food courts offer, but post-pandemic, this is impacting them.
  • Integration challenges. MTY’s aggressive acquisition strategy increases the risk of failing to integrate acquired brands, leading to inefficiencies, cultural conflicts, or underperformance.
  • Consumer spending. MTY is exposed to changes in consumer spending habits, particularly during economic downturns, when consumers may dine out or shop less, particularly with its focus on food courts.

Canada’s Cheapest Pizza Chain

Pizza Pizza Royalty Corp (PZA.TO)

Pizza Pizza Royalty Corp through its subsidiary, Pizza Pizza Royalty Limited Partnership, owns and franchises quick-service restaurants under the Pizza Pizza and Pizza 73 brands. It receives the benefit of Pizza Pizza Royalty and Pizza 73 Royalties, as well as royalty payments under the international agreement, indirectly through its interests in the partnership.

P/E: 13.1

5 Yr Revenue Growth: 2.6%

5 Yr Earnings Growth: 2.5%

5 Yr Dividend Growth: 0.7%

Yield: 7.3%

  • Pizza Pizza is one of Canada’s leading quick-service pizza chains, with a strong brand identity and extensive reach, particularly in urban areas and populous provinces like Ontario. Its sister brand, Pizza 73, provides additional exposure in Western Canada.
  • Similar to other royalty funds, PZA earns income from a percentage of system sales, offering stable and predictable cash flows with minimal operational risk.
  • The fund is structured to provide consistent monthly distributions, making it appealing to income-focused investors.
  • Pizza Pizza is known for offering value-priced menu options, similar to Dominos, and convenience through delivery and takeout, positioning it well in a competitive quick-service pizza market.
  • Same store sales growth. As a royalty fund, system sales directly impact Pizza Pizza’s revenue. SSSG reflects the chain’s ability to grow organically through higher customer traffic and average ticket size.
  • Menu innovation. Pizza Pizza operates in a competitive market dominated by players like Domino’s, Pizza Hut, and local pizzerias. Offering innovative menu items and maintaining a strong value proposition is essential to attracting and retaining customers.
  • Store counts. Pizza Pizza went through some difficult operation times in which store counts started to shrink. Although the company has rebounded post-pandemic due to a cost of living crisis among Canadians causing them to shift to cheaper alternatives, it will need to maintain momentum in a falling rate environment.
  • Pizza Pizza faces intense competition from both global giants like Domino’s and local independent pizzerias. Competitors often undercut on pricing or offer differentiated products that could impact Pizza Pizza’s market share.
  • Pizza Pizza’s revenue is heavily concentrated in Canada, mainly Ontario, making the business particularly dependent on the economic conditions and competitive environment within this province. Any regional challenges, such as declining consumer spending or increased competition, could disproportionately impact overall system sales.
  • System-wide operations, including delivery logistics, supply chain management, and restaurant staffing, are critical to Pizza Pizza’s success. Disruptions caused by labor shortages, rising wages, supply chain bottlenecks, or technology failures (e.g., online ordering platforms) could harm sales and franchisee performance.

Overall, most of the exposure to the restaurant industry here in Canada is through royalty companies

There are a lot of quality restaurant stocks on the TSX. However, for the most part, most of them will be in the royalty segment, where investors get a chunk of gross sales.

I opted for not listing companies like The Keg and Boston Pizza, as I don’t really feel these companies are high quality, especially with the cost of living crunch we are currently facing. But, these companies are also royalties.

What this means is you will not participate in the restaurant’s bottom line (earnings) in the royalty pool. Still, you will also avoid exposure to rising wage pressures, costs of running the restaurant, and any other aspects of running the business.

With Restaurant Brands International and now A&W Food Services, however, you are exposed to all this, which can be a benefit if the company is growing at a strong clip. It is best to determine your investment strategy and decide based on it.