You’re here because you and I want to get in on Subway’s stock price. Like me, you are probably looking to take a bite from the foot-long giant Sandwich maker, and 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. Therefore, it is not on any stock exchange. You couldn’t buy stock in Subway even if you wanted to. So, no, there is no Subway stock price. However, we will discuss some healthy alternatives to consider for investing below.
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Table of Contents
Subway Introduction (No Stock Symbol)
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.
Three years later, they renamed the restaurant “Subway.” Fast forward to 1982, and the sub-making machine snowballed to 200 franchises with a global footprint
One interesting point about Subway is that its 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 the company about 8% of their revenue and a 4.5% advertising fee. Good.
That said, on average, individual Subway restaurants pull in about 500,000 dollars a year. So, even though you can’t buy Subway stock, restaurant owners make a healthy income by investing in the franchise. So, if you can’t buy shares, maybe you want to open a shop. The company has done well for itself on all fronts, both in terms of revenue and reputation. 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 are even top of McDonald’s regarding the number of restaurant locations. Maybe it is because they have smaller square foot requirements, less staff, and less overhead in general.
Oh, and they generate an estimated $17 billion in revenue annually. It’s not too shabby for a lettuce, tomato, and bread operation.
Subway Buyout
A private equity firm named Roark Capital bought Subway. It was the highest fast-food acquisition ever being sold for billions of dollars.
The FTC decided to investigate the sale in 2023. In August 2023, the Subway announced their acquisition but wasn’t made official until April 30, 2024. The FTC investigation must not have turned up anything nefarious.
What does that mean for Subway stock moving forward? They’re still a privately owned company. Subway will continue to focus on growth and providing delicious sandwiches. We’ll see if Roark decides to go public with Subway.
Doctor's Associates
As mentioned above, since Subway is owned by a private company, previously by Doctor’s Associates, you can’t buy stock in Subway itself.
But this cloud has a silver lining: 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 will show you an alternative investment opportunity within the fast-food sector that may fit your portfolio well.
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®.
RBI is a powerhouse formed in 2014 by the $12.5 billion merger between Burger King and Tim Hortons. They are also the owner of Popeye’s and the world’s fifth-largest operator of fast-food restaurants. 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.
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Restaurant Brands International (QSR)
One would opt for stock in Restaurant Brands for a few reasons. Firstly, the companies in the RBI umbrella have existed for over 150 years combined. They are proving to withstand the test of time.
And it’s that track record of success in all economic climates that makes 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.
Restaurant Brands International (QSR) TipRanks Stock Forecast Report 3/24
Subway Giving Back
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 thousands of needy youth throughout Canada.
Thirdly, their future looks bright. Just last year, sales grew to over 8%, thanks to a higher net restaurant count – 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$2.08 per share! Moreover, their 2019 payout ratio was 64% of free cash flow.
Last but not least, at the end of 2019, Buffett held more than US\$468 million worth of stock in Restaurant Brands.
Chipotle Stock ($CMG)
$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 it is 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 it’s 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.
Stock Signals & Alerts
Final Thoughts: Subway Stock
Even though you can’t buy Subway stock, you should consider buying stuck in Restaurant Brands stock or \$CMG. With the market correction in early 2020, Restaurant Brands is a bargain hunter’s dream stock.
Restaurant Brands is great value for money as the fifth-largest publicly listed North American fast-food business. They’re currently offering a 3.8% yield, and analysts have a 12-month price target of 43% higher!
Given that they are down a decent amount, snapping discounted shares is a strong play right now.
Frequently Asked Questions
Subway is owned by a private company, the same as Doctor's Associates. They are not a publicly traded company on a major stock exchange. As a result, you can only buy Subway stock if you can invest in large restaurant companies.
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. Twenty-one thousand, to be exact. They're in 100 countries all over the world.
Subway is a privately owned company named Doctor's Associates Inc.
