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  5. KEG.UN: Please advise if this company is a long-term hold. [Keg Royalties Income Fund (The)]
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Q: Please advise if this company is a long-term hold. Is its dividend sustainable? Thank you.
Asked by David on March 19, 2025
5i Research Answer:

The Keg Royalties Income Fund (KEG.UN) is a $240M fund that invests in the Keg Rights Limited Partnership in connection with the operation and franchising of Keg steakhouse restaurants. It has a distribution yield of around 8%. Sales growth has mostly been flat over the past several years, cash from operations has shown a steady growth rate, but still quite modest. It pays around $14M each year in distributions, and its free cash flows have been around $28M. We would consider the distributions sustainable, and while its unit price has declined, its total return CAGR over the past 20 years is 8%.