John StephensonKeg Royalties Income FundKEG.UN.TOHOLDAug 30, 2016
Not widely followed and not very liquid. Overall this is a decent story. You would have to evaluate some of the story to Alberta and whether that is significant. A lot of these restaurant royalty funds have done quite well, because the consumer has proven that they are overspending like a drunken sailor on a shore leave.
This Vancouver based restaurant royalty has emerged thriving following the pandemic shut-downs. The company is prudently managing cash reserves to retire debt and support a strong dividend. Latest reported earnings showed a 14% increase in sales for the year to date. We recommend placing a stop-loss at $11.75, looking to achieve $16 -- upside potential of 18%. Yield 8.4%
It has been very well managed and has been one of the better performers. He is staying away from restaurants as they are expensive and have very little growth. This is one of the better ones, however. If you are happy with the dividend then hold on to it.
This is a good business and the royalty structure is a good structure. This is sort of a beneficial thing to put in something that doesn’t attract full taxation. These are good retail holdings.
(A Top Pick May 13/09. Up 30% excluding distributions.) Will probably take a little pause but he can see another $1-$2 in it plus distributions of 10.56%. His exit price would be $11.50.
Doing okay in Canada but sales in US are not as good. Have been hurt by the rising Cdn$, which is coming off. Well managed, but is concerned about sales softening in central Canada and the US.
Not widely followed and not very liquid. Overall this is a decent story. You would have to evaluate some of the story to Alberta and whether that is significant. A lot of these restaurant royalty funds have done quite well, because the consumer has proven that they are overspending like a drunken sailor on a shore leave.