Topic: How To Invest

What is your opinion of Pizza Pizza Royalties Income Fund, A&W Revenue Royalties Income Fund and The Keg Royalties Income Fund … and perhaps their plans to convert? Thank you.

Article Excerpt

Pizza Pizza Royalties Income Fund, $8.18, symbol PZA.UN on Toronto (Units outstanding: 21.8 million; Market cap: $178.5 million; www.pizzapizza.ca), holds certain trademarks and trade names used by Pizza Pizza restaurants in Canada. The trademarks are licensed to Pizza Pizza for 99 years. In return, Pizza Pizza pays the fund 6% of the revenues of Pizza Pizza restaurants (9% on Pizza 73 restaurants). There are currently 590 Pizza Pizza and 81 Pizza 73 restaurants. Pizza Pizza restaurants feature self-service counters. Most of these outlets range in size from 1,600 to 3,000 square feet, and have seating for about 25 customers. Pizza 73 restaurants are about 1,200 square feet, and have limited seating. Both restaurants typically feature takeout and delivery. Pizza Pizza aims to locate both types of restaurants in highly visible areas with lots of traffic. The fund currently pays distributions of $0.93 annually, for an 11.4% yield. However, it will cut its distributions to roughly $0.70 annually in 2011. The fund…