Sunday, January 26, 2014

Recent Purchase

What do a lot of people do on their way to work?  No matter what Canadian province I am in, there is always a huge line ups inside the restaurant and in the drive thru.  I decided to make a purchase in this successful business.

On January 24th, I purchased 100 shares of Tim Horton's (THI) on the Toronto Stock Exchange. The purchase price is $59.70 plus $4.95 commission for a total of $5974.95.

Tim Horton's is a restaurant that serves coffees, specialized coffees, teas, donuts, timbits, muffins, soups, sandwiches etc. This is a no frills coffee shop. The morning coffee is a daily ritual for most people on their way to work.

Tim Horton's first store (Tim Horton Donut Shop) opened in Hamilton, Ontario in an old gas station. The restaurant was owned by Tim Horton (Toronto Maple Leaf hockey player) and a police man named Ron Joyce. Tim Horton unfortunately was killed in a motor vehicle accident in 1974.  Ron Joyce then bought out the family's share of the business for 1 million dollars.

Currently, Tim Horton's has about 4300 hundred stores, with about 3400 being in Canada. As of Friday's close, THI trades at a P/E 21.13 and a yield under 2%. I believe THI is slightly over valued.

I am going to sell a $60.00 covered call on this stock. I have put in my option order already. I am slightly bullish on this stock.


     I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.  Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk


  1. Hi IP,

    I have never heard about Tom Horton´s.
    Starbucks will be the greatest competitor in this business.
    But Tim Horton´s has a better EPS and a higher dividend yield than Starbucks.
    I think that will be a good purchase!


  2. Dividenden- Sammler,

    Tim Horton's became a public company in 2006. It was recently bought by Wendy's Restaurants. In 2009, Tim Horton's came a stand alone public company headquarted in Canada.

    Tim Horton's coffee is cheaper and not as good as Starbucks. Tim Horton's gets more traffic as people are hesistant to even try Starbucks due to the cost. The atmosphere at a Starbucks is a lot better than Tim Horton's. Tim Horton's as people from all ages and walks of life come to their stores.

    Besides Starbucks, there is also McDonald's that compete for the share of the coffee business. There are other players but they are not as big.

    1. Thanks for the article and for this comment on the difference between Hortons and Starbucks. Being in the US, I am not going to have much access to them to test it myself.

      I would add that Dunkin Donuts is making a push for coffee and they are expanding. Though I wouldn't touch them investment wise.

    2. My reply might be worded wrong. Wendy's acquired Tim Horton's in 1995. In 2006, it became a public company and was spun off as a separate company. In 2009, it was reorganized corporately as a Canadian public corporation