Good mentionAlaris Royalty Corp.(TSX:AD) is flirting with a 52-week low after bad news came out about KMH, one of its partners. Management wrote off some of the company’s exposure to KMH after it was revealed the company stopped paying royalties.
But things aren’t nearly as bad as the market thinks. Alaris should still have enough in earnings to pay shareholders the generous 7.3% dividend, and management is currently working out a deal with KMH that should get most of Alaris’s original capital back.
In the meantime, Alaris has 15 other royalty deals that are returning between 10% and 15% annually with many having inflation protection built in. Additionally, the royalty business is an easy one to scale, assuming opportunities exist. Management has proven they are adept at finding deals and increasing shareholder value, so it’s likely today’s low price is just a temporary phenomenon.
Found in this article: https://www.fool.ca/2016/09/06/should-dividend-investors-go-dumpster-diving-for-better-opportunities/