Pizza Pizza Royalty (PZA.TO)

A royalty company which gets a 6% royalty from all the Pizza Pizza locations across Canada. A decent business model. The issue is same store sales for some locations, which were down about 1% because they increased prices. That resulted in a bit of a decline in traffic. Thinks the broader quick serve restaurants segment is going to be somewhat challenged.

Has done exceptionally well as a royalty and has outperformed the group. Valuation is fairly high for the growth they are getting. Doesn’t see any problem with taking some profits. He worries about the sector. These things are trading at 15X, which is a pretty rich multiple.

A royalty Pool. A wonderful business and really well run, and pizza never goes out of style. They have a very dominant position in the market. Feels that the dividend grinds higher year-over-year.

(Market Call Minute.) This has paid a great dividend through the years. Dividend yield of 6%.

Considered a consumer discretionary, but to him it borders on the consumer staples area. If it drops below its support level of around $13, something might be up. Chart shows a big head and shoulders rolling top, which is why the $13 level becomes really, really important. You bring in a lot of volume once you break down below that. If it breaks that $13 level, he would stay away.

This has a decent yield. The problem with these types is the growth potential. The yield looks very attractive, but what is their ability to grow that yield in another environment? If you are just after yield, and a stable one, this is okay. He doesn’t see any possible dividend increases.

Pays a nice dividend yield and has a reasonable business model that keeps on grinding higher. Thinks it has been pushed a little bit ahead of itself in valuation because of the 5.8% dividend yield. Will probably continue to do well as long as they keep on opening stores. Very illiquid so he would be careful with it.

Chart looks really good. Resistance at $10.90. 7% distribution. You probably want to add to that if it breaks out above $11. Sure this is discretionary, but if you take the family out, you probably go to a decent place, so ordering out is more of a right of passage and therefore it is not really discretionary.

Decent yield. Not a very exciting business. Not a fast growth business. His expectation would be the yield plus a little bit. 7% yield is sustainable.