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Restaurant Brands International Inc. (QSR)
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A&W Revenue Royalties Income Fund (AW.UN)
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Boston Pizza Royalties Income Fund (BPF.UN)
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Keg Royalties Income Fund (The) (KEG.UN)
Q: Can you comment on KEG's and weather is still a HOLD for income
5i Research Answer:
KEG operates as a franchise steakhouse restaurant and is now trading at 5.2x times' EV/EBIT, the lowest valuations in years. In the last few years, KEG has struggled to grow its topline, revenue in the trailing twelve-months is only 10% higher than FY2019, despite inflationary pressures throughout that period. The balance sheet is strong, with net debt of $12M. We don’t think the growth prospect is too attractive from here. Overall, we view it as a fine royalty income name, but we prefer other names in the space such as AW.UN, BPF.UN and QSR.