Sir Royalty Income Fund SIRZF

If you bought at $1.50...

[BlueJay2020]

...your effective yield on cost is 72% - well done!

I bought some sub-3 which equates to 36% - I'll take it!

P.S. I don't of course place any emphasis on yield on cost as an investing metric - but it's sometimes gratifying to look back on as a validation of your investment!

[flamingogold]

I had bought some for my wife's TFSA at exactly $2 and later some for my daughter in the high $2's and low $3's. I eventually sold them for a nice profit because I was already overweight in my non-registered account, those shares which I still hold for a double digit 20% yield. In hindsight of course, it would have been better to hold it all, but there was a time where it looked like

[nedstar71]

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!

[BlueJay2020]

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

[nedstar71]

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'

[flamingogold]

No one knows where the top is just as much as we did not know where the bottom was. But, just over 2 years ago this was trading for $17 with a distribution of 10.5¢ which is just 17% above our current distribution. Meanwhile, our share price is still 60% below that high mark. In a post covid environment where thousands of restos went under who knows what the potential upper limit is. What I

[Tommy123]

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[BlueJay2020]

I'd love to agree with your logic and I'd love you to be correct in 2022, but unfortunately I can't! Which restaurants closed, and are they close to one of our restaurants and where they direct competitors?  I don't know the answer to that. There are too many other variables at play, including how big the overall restaurant pie is, not just how big a slice SRV gets. 

[flamingogold]

I won't say that I totally disagree with a share price above $15. Despite all the damage from covid, what it did do is fast track SRV to the digital age. While there's plenty of room for improvement, they have an app now that can readily accept your order either for pick up or delivery. While I prefer to dine indoors, during covid this was not an option. I tried the app (albeit with some

[BlueJay2020]

Yes, you can't rule anything out! All I'm saying is that I can't make a credible investment thesis for anything above $15, even though I am long and bullish on the stock.  Nor would I advise anyone opening a position at, say $10.50, on the grounds that it's going to almost double.  But I'd advise them to open a position now for income with a potential upside on the SP

[Robsopinion]

Yes, but remember SIR also closed restaurants during the last 18 months.  the industry, across the board is increasing prices, all of the input costs for restaurants have increased, and with razor thin margins, price increases are the only option. Since we take our cut off top line, the top line sales, off fewer guests, and fewer stores, should be our saviour. Until the customers run out of

[BlueJay2020]

Ah, a classic discussion of the economics of supply and demand. Is the demand for restaurants sufficiently inelastic to allow for menu price increases to flow through to us?  I would say yes - but only in the short-term while there is a novelty factor for being in a restaurant.  After that, at best I think it's a zero sum game.  The increase in prices will be offset by fewer

[Tommy123]

This post has been removed in accordance with Community Policy