Tim Hortons opened it first restaurant in 1964. The site of the first Tim Horton's was in an old gas station as shown in the image below. It served coffee and donuts. The store is named after it founder, Tim Horton. Tim Horton played NHL hockey for the Toronto Maple Leafs. During the 1960s, NHL players were not making a lot of money relative to other jobs like nowadays. Tim Horton started a coffee and donut shop to make extra money.
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| Cortesy of Tim Horton's Online Annual Report - The first Restaurant |
In 2014, Tim Hortons celebrated it 50 year in business, which all started in the first restaurant above in Hamilton, Ontario. Tim Horton died in a car crash in 1974, but he partnered with a guy named Ron Joyce early on in the business in 1967. Ron Joyce continued to building the company one restaurant at a time.
Some important mile stones for Tim Hortons.
- In 1984, the first US restaurant opened in Tonawanda, New York.
- 1991, 500th Canadian restaurant opened in Aylmer, Quebec.
- 1995- Tim Horton's is purchased by Wendy's International Inc.
- 2000 - 2000th restaurant opens in Toronto, Ontario.
- 2006 Tim Hortons is completely spun off from Wendy's International and completes an IPO
Some stats on the company as per Yahoo Finance Key Statistics as of July 22, 2014.
| Market Cap (intraday) | 8.06B |
| Enterprise Value (2014-07-23) | 9.28B |
| Trailing P/E (ttm ; intraday) | 20.50 |
| Forward P/E (FYE 2015-12-29) | 16.59 |
| PEG Ratio (5 yr expected) | 1.92 |
| Price/Sales (ttm) | 2.43 |
| Price/Book (mrq) | 15.67 |
Tim Horton's current pays a dividend of $1.28 CDN annually. At today's share price, this represents a yield of near 2%. Over the last couple of years, Tim Hortons has been under pressure from activist shareholders who want investors to be rewarded with larger dividends. Th. e most recent dividend raise was 23%. Tim Hortons revamps its menu from time to time to compete with their main competitors. The main competitors are McDonald's and Starbucks. Currently, 8 out of every 10 cups of coffee is sold at Tim Hortons.
Conclusion: I believe this company will continue to do well over time. When you go to a Tim Horton's restaurant or through the drive thru, there are usually large lines of people or a lot of people sitting in their restaurants. These long line ups represent and ever increasing revenue stream day after day. The dividend is likely to increase, which will mean my money will be working harder for me year after year.
I currently own this in my margin account.
Disclosure: Long THI
DISCLAIMER
DSF,
ReplyDeleteThanks for dropping by. I believe Tim Horton's has to change more of their restaurants like putting in more comfortable chairs and fire places. In most of their small restaurants they have only the hard chairs and lack space for the type of chairs you would have in your living room.
I think MacDonald's should do well. I never heard of anyone saying they disliked their coffee. As long as they have healthy food on their menu, I think they will be a good company to own for years to come.
DSF,
ReplyDeleteI was shocked at this today when I found out. It was just like a week and a half ago it was like $60.00 a share. On BNN, which is Business News Network in Canada, one of hosts said that Burger King is undervaluing Tim Horton's and believe it should be $10.00 higher.. Wendy's bought Tim Horton's before and then spun it off.
There are still stores which stand alone that have Tim Horton's and Wendy's attached to each other. From what I am reading if this goes through Burger King will be able to become a Canadian company and pay less corporate taxes than being in the US.
I was contemplating buying more shares days before the price jumped to over 65 dollars.. It is still great that the share price jumped that much.