Sir Royalty Income Fund T.SRV.UN

Alternate Symbol(s): SIRZF

Consumer Cyclical Restaurants

SIR Royalty Income Fund (the Fund) holds investment in SIR Corp (SIR). The Funds' investment, SIR is engaged in the business of owning and operating full-service restaurants in Canada. SIR has concept restaurant brands, including Jack Astor’s Bar and Grill, Scaddabush Italian Kitchen & Bar, and Canyon Creek Chop House, signature restaurant brands, such as Reds Wine Tavern, Reds Midtown Tavern, Reds Square One, and The Loose Moose, which are used by SIR under a license agreement with SIR Royalty Limited Partnership (the Partnership. The Fund receives distribution income from its investment in the Partnership and interest income from the SIR Loan. The Fund indirectly participates in the revenues generated under the License and Royalty Agreement through its Investment in the Partnership.

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Sir Royalty Income Fund > If you bought at $1.50...

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Comment by nedstar71on Sep 13, 2021 2:05pm

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Post# 33849365

RE:RE:RE:RE:If you bought at $1.50...

I can't disagree I'm just concerned the current distibution may be masking some Covid related weakness in the undelying business. By the time it might become an issue business should have picked up enough so it isn't an issue. I went to the Jack Astors on Wellington St in London Friday and it wasn't as busy as I had hoped. As you say my position was small so take it for what it's worth.

BlueJay2020 wrote: Each to their own!

The SP was about $9.15 pre- the 28% dividend bump. It's up about 15% as I type since then, which I don't find extraordinary at all given that the SP for this type of stock is so tightly tied to the level of distribution.

Assuming the current distribution level of $1.08 represents 100% of earnings (which a restaurant royalty stock should roughly be over the long-term) that implies an earnings multiple of less than 10. That's by no means out of whack. And I have already said why I think material downside to the distribution is not a huge risk.

I still see 25% upside to SP from here, but it's quite understandable for dabblers to take the money and run at this point. A small position inherently communicates a lack of confidence in the stock - irrespective of what the SP is.

nedstar71 wrote: The action this is getting from that dividend bump is truly extraordinary. I didn't get in that low but did just sell the small position I had. To me upside is limited and I find it difficult to know what the actual sustainable dividend will be going forward. I fear less than stellar quarterly results may put some pressure on. Good luck all!