Stockchase Opinions

William Chin Boston Pizza Royalties BPF.UN-T PARTIAL SELL Jan 21, 2020

Pizza is a challenging space and BPF doesn't execute as well as, say, McDonald's. BPF's 3-year chart shows it's still in a downtrend. The current stock bounce is an opportunity to sell, not buy.

$14.830

Stock price when the opinion was issued

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DON'T BUY
It is an okay company but same store sales growth is anemic. He prefers AW.UN-T. BPF.UN-T is okay for income but not for growth.
DON'T BUY
It was one of the original restaurant royalty income companies. They have expanded quite rapidly. Their same store sales growth has been slowing and their payout ratio is slightly over 100%. He prefers to own the whole company and see it reinvesting in the business.
DON'T BUY
It pays an 8% yield but has fallen more than that the past year. The trend says lower lows and lower highs. Not attractive. It's approaching and reacting to its 200-day moving average.
DON'T BUY
The concern is the 8.2% yield at 85% payout. It may be sustainable. Earnings estimates have been shaved by 2% in the last 90 days. Growth is forecast to drop. It is 5 times PE to Growth next year so he prefers others.
DON'T BUY
There’s a broader industry trend in casual dining. It’s tougher for restaurants to make money. Trends are going towards delivery services and restaurants should use these to be competitive. However, there is a hit on the margin because there isn’t alcohol sales when delivered. Maybe the concept is a little tired.
COMMENT
Safer than a non-royalty stock? They pay out everything they earn at a 13.5% dividend yield. It's sold off sharply, because it is perceived that fast food chains will close down during this outbreak.
DON'T BUY
It's a royalty stream which is like a bond proxy with a 7% yield. There's not a lot of growth. It has exposure to the restaurant segment which has a lot of headwinds so he does not favour it.
BUY ON WEAKNESS

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Reported a decent quarter. Some change in business mix sticky. Decent growth expected. Raised dividend by 17.6%. Unlock Premium - Try 5i Free

HOLD
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Debt becoming a concern. Delivery and take-out only sources of sales. Special dividend paid this quarter. Dividend reinstated at a lower rate.