RE:RE:Impending newsJayBanks wrote: Well we got our answer!
Seems like this royalty is structured very similar to what we are doing with Mr. Lube.
Also now we have 2 food based holdings. SVR eat your heart out! (But they have better proformance than us)...
So some numbers to look at:
Current dividend yeild on today's close = 9.76%
Pro-Forma distributable income yeild = 11.53% (28.94 cents, projected)
Very glad I added 2000 shares at 2.57 last week (I intended to add more this week, but issues arose)
Seems like we will get more payout increases when this transaction gets fully paid off (I don't see a share offering mentioned like Ned pointed out on the last one recently, if there is, please point it out again)
And Ned did call this from the share volume movement, let's see if he likes it... I do!
I'd say it's pretty much a wash.
I wouldn't have expected the market to react too much, after all not much has really changed. Dividend raise is negligible and while debt is better than diluting with $2.30 shares, given the actual returns neither route is really worth bothering with interest rates where they are imo, as I discussed in previous posts.
I've never heard of BarBurrito, and although I now see there are a few in the town I live, I've personally never understood how any of these overly saturated burrito franchise joints survive. I tried Much Burrito years ago and was thoroughly underwhelmed. The burrito just isn't a very good item imo. At least they didn't go with Fat Basterd Burrito lol. Horrid name that has to hurt business more than it helps by being cheeky.
Qdoba on the other hand is an excellent Mexican chain and has some serious growth potential ahead of it. If you haven't tried it go in and have one of their bowls, they're superb.
To me burrito places are a dime a dozen and any one of the numerous chains could disappear instantly and nobody would even blink an eye. But I'm obviously not a burrito guy so take it fwiw.
So yeah, other than another loooong awaited royalty acquisition, taking on large debt, CEO making a nice chunk for 5(?) years, small dividend raise where I get $500 more a year, to me it's a wash. If we take out $150 million in debt at high interest rates combined with even more risk will I gain a whole $1000 more a year? I mean, what is the point again? I understand the CEO's motivation but for shareholders the benefits related to these deals are pretty light.
That being said I like the 4% annual increase for 7 years, and anything that makes DIV less reliant on Mr. Lube has to be a plus. The stock is too cheap for sure, but same story for this sector and others unfortunately.