Sir Royalty Income Fund T.SRV.UN

New all time high

[logicandinertia]

Prior to the two distribution increases this year, SIR was priced at a yield suggesting a dividend cut, not multiple dividend increases.  But if we dig deeper, one finds that the market is still not pricing the asset properly. 

What is interesting is this:  prior to the first dividend increase in April, SIR was trading around $14.20.  Since then, the dividend has been increased by 10.3 percent .  How much has the share price appreciated?   At the current price of $15.66, the share price is up “10.3%”, the same as the dividend increase.  In other words, the market hasn’t credited SIR for their progress with a lower yield and instead just moved the share price up in conjunction with the dividend hike.

at the same 8 percent yield. SIR remains insulated from near term interest rate hikes .  

Buying a well run dependable business in Canada (dollarama, Boyd group, etc) typically has paid off for Canadian retail investors.  SIR is no different.  Collect 8 percent and wait patiently for additional dividend hikes or the eventual buyout.