December 10, 2018

BPF-U Boston Pizza Royalties Income Fund

 

 

The Boston Pizza Royalties Income Fund (BPF) is a great play on the retail food industry if you want to diversify your dividend portfolio.  It is self-described as Canada’s number one casual dining brand.  With over 340 restaurants across Canada, and 2010 sales of over $853 million, it is tough to argue with that claim.  The franchise started in Edmonton, Alberta in 1964.  Their business model includes the unique concept of “two experiences under one roof.”  This refers to the common layout of Boston’s locations where a sports bar is often adjacent to a family dining atmosphere.  Boston Piazza (BPF) prides itself on keeping costs low, consistently reinventing itself, continuing their proud tradition of marketing excellence, and increasing their number of locations year over year.

 

Boston Piazza management just reported same store sales growth to the tune of 4.9% in 2011 over 2010.  This comes on the heels of a tough year for BP that seen a net loss in that department of 1.3% in 2010 from 2009’s numbers.  The extra profits were primarily a result of increased takeout and delivery sales (attributed to the escalation in marketing for Boston’s (BPF) online platform).  The new chicken wing product and promotion was also a large draw during the past year.  Other areas of growth were the seasonal favourites menu, and gift card sales during the holiday season.  Mark Pacinda, the President and CEO of BPI stated, “We are very pleased with the strong same store sales growth of 6.4% in the fourth quarter and 4.9% in 2011. This is a key metric with respect to distribution growth for Boston Pizza Royalties Income Fund and our steady top line growth has enabled the fund to increase monthly distributions to unitholders a total of 14 times since the initial public offering in 2002. In addition, Boston Pizza International opened seven new full service locations in 2011 and posted record annual system-wide sales which exceeded $900 million from 343 locations, further expanding Boston Pizza’s position as Canada’s #1 casual dining brand.”

 

Boston Piazza management continues to expand their brand as evidenced by opening seven new locations in 2011.  This trend looks to continue in 2012 as plans are in place for several new openings across Canada.   Units of the fund recently opened at $18.09.  This shows a mark of investor confidence as 52-week highs of the Boston Piazza Royalties Income Fund (BPF) are $18.41, and are considerably up from the 52-week lows of $10.30.  The annual dividend of $1.18 gives the find a yield of 6.5%.  While that yield number looks big, I’m not encouraged by Boston’s relatively low profit numbers over the last few years.  There are probably more stable companies out there for your consideration.  If you are willing to bet the company’s brand will sustain them through some lean times, it might end up being a fine purchase, just one I’m not willing to make at this point.

 

BPF-U Boston Pizza Royalties Income Fund Dividend Stock Graph:

 

TSE BPF

BPF-U Boston Pizza Royalties Income Fund Dividend Metrics:

TickerNamePriceDividend YieldPayout RatioINDUSTRY_SUBGROUPDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
BPF-UBoston Pizza Royalties Income Fund14.087.15735.97Retail-Restaurants0.28424921.313627-6.739128