Boston Pizza Royalties Income Fund (TSE:BPF.UN)
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Thread: Boston Pizza Royalties Income Fund (TSE:BPF.UN)

  1. #1
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    Boston Pizza Royalties Income Fund (TSE:BPF.UN)

    Is BPF.UN going parabolic? What's up? It passed $18.00 today.


  2. #2
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    Hard to say... has a 6.5% dividend yield now, but for the longest time it was 7.5-8%. Perhaps people don't want to sell it and its being bid up by some funds looking for income?

  3. #3
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    Putting things into perspective, in 2006 the stock was $20, in 2008 it went down to $6. A low volume stock like this can fluctuate greatly, I think it'll settle at a fair value 6% yield or $20

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    Been keeping a distant eye on this one. Seems like a good dividend income stock - as long as you are willing to hold it longer term. It's fluctuated... and the yield is nice...

    Edit: It's an income fund but in fact there is no difference anymore, right? It's simply a stock that pays a dividend? And you can of course have a capital gain/loss
    Last edited by Kaitlyn; 2012-03-27 at 09:38 PM.

  6. #5
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    Its an income fund but yes it pays eligible dividends now. Its a bit of a dividend growth stock as well - it's raised its distribution twice in the last year alone.

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    I don't hold BPF.UN or KEG.UN, but if I'd buy, I'd prefer KEG. (for both : eat dinner and buy shares ). KEG has better yield, better payout and P/B and much better P/E

  8. #7
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    Quote Originally Posted by Kaitlyn View Post
    Been keeping a distant eye on this one. Seems like a good dividend income stock...

    Edit: It's an income fund but in fact there is no difference anymore, right? It's simply a stock that pays a dividend? And you can of course have a capital gain/loss
    Quote Originally Posted by doctrine View Post
    Its an income fund but yes it pays eligible dividends now. Its a bit of a dividend growth stock as well - it's raised its distribution twice in the last year alone.
    Yes it is an income fund.

    Yes there is a difference between an income fund versus a dividend paying stock.

    No - it does not pay eligible dividends only, a small amount of Return of Capital (RoC) is also paid - will all the bookkeeping to adjust the Adjusted Cost Base (ACB) this requires. This link indicates the tax breakdown of distributions, including RoC:
    http://www.bpincomefund.com/en/faq.aspx

    Note that where the ACB falls to zero or negative, the RoC portion of the distribution has to be declared as a CG, on each tax return going forward.
    http://howtoinvestonline.blogspot.ca...good-from.html

    For this reason, some investors will only put an investment like this in a RRSP or TFSA so that there is no need for the bookkeeping.


    Another difference is that it pays a higher tax rate than a dividend stock company does - which is why the distribution payments dropped when the tax rate changed for non-REITs. Then too, most stocks pay 100% eligible dividends, 0% RoC so for the stock, there is no need to adjust the ACB with each payment.

    In all cases, trust, REIT, stock - when the investment is sold there will be either a capital gain or loss.


    It might be worth checking out the CMF taxation section, "How Investment Taxes Work".

    From personal experience, it's a pain in the butt to discover the tax treatment is different than expected and to have to re-calculate with limited info, over several years.

    Understanding the tax treatment and setting up the bookkeeping in advance is simple in comparison.


    Cheers
    Last edited by Eclectic12; 2012-03-28 at 09:02 AM. Reason: flow

  9. #8
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    Quote Originally Posted by Eclectic12 View Post
    Yes it is an income fund.

    Yes there is a difference between an income fund versus a dividend paying stock.

    No - it does not pay eligible dividends only, a small amount of Return of Capital (RoC) is also paid - will all the bookkeeping to adjust the Adjusted Cost Base (ACB) this requires. This link indicates the tax breakdown of distributions, including RoC:
    http://www.bpincomefund.com/en/faq.aspx

    Note that where the ACB falls to zero or negative, the RoC portion of the distribution has to be declared as a CG, on each tax return going forward.
    http://howtoinvestonline.blogspot.ca...good-from.html

    For this reason, some investors will only put an investment like this in a RRSP or TFSA so that there is no need for the bookkeeping.


    Another difference is that it pays a higher tax rate than a dividend stock company does - which is why the distribution payments dropped when the tax rate changed for non-REITs. Then too, most stocks pay 100% eligible dividends, 0% RoC so for the stock, there is no need to adjust the ACB with each payment.

    In all cases, trust, REIT, stock - when the investment is sold there will be either a capital gain or loss.


    It might be worth checking out the CMF taxation section, "How Investment Taxes Work".

    From personal experience, it's a pain in the butt to discover the tax treatment is different than expected and to have to re-calculate with limited info, over several years.

    Understanding the tax treatment and setting up the bookkeeping in advance is simple in comparison.


    Cheers
    How do you know whether a dividend-paying stock is also a return on capital?

  10. #9
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    Quote Originally Posted by Kaitlyn View Post
    How do you know whether a dividend-paying stock is also a return on capital?
    The easiest way I've found is to go to the company web site under the section marked something like "Investor" or "Investor Relations".

    If there's RoC, there's usually a section marked something like "Distribution Info" or "Tax Info" or similar. Links that are labeled "Distributions" are a safe bet there's RoC. Here's another example from RioCan, which is REIT.
    http://investor.riocan.com/Investor-...y/default.aspx

    Bear in mind that some mutual funds (MF) and ETFs also pay RoC. Here's an ETF example:
    http://ca.ishares.com/product_info/f...utions/XIC.htm

    Edit: Make sure you scroll down to the "Annual Distributions" table at the bottom.


    For comparison, the link below is the TransCanada (TRP) investor section, which is a dividend paying stock. Note that it refers to "Dividends".
    http://www.transcanada.com/dividends.html


    Note that there are now two types of trusts - the REITs like RioCan that corporately pay the trust tax rate and non-qualifying trusts such as Boston Pizza which pay a higher tax rate. Something like 95% of trusts which are not a REIT, converted to a stock company by Jan 1st, 2011 to avoid the higher tax rates. There are a few that have stated they won't convert and fewer still who are using up their tax credits before converting in the future.


    Cheers
    Last edited by Eclectic12; 2012-03-28 at 10:52 AM.

  11. #10
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    It looks like 1.34% of the distributions were ROC in 2011. The remaining was eligible, so while there is a minor bookkeeping requirement, it is a very good stock for taxable accounts.


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