# KEG Royalties Income Fund (KEG.UN)



## Betzy (Feb 7, 2011)

Anyone one else looking at this one, they say invest in what you know...I know this one WAY too well, I should own shares already with the "Investment" I make there on a regular basis.
Seriously though, they have an up and down market value for the last ten years approx 30% gain in 10yrs, counting 2008. But the Div is very attractive at 7.28% right now and its been like this for a while. P/E is 10.6x average.
Im seriously thinking of starting a long term portion on this one.


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## Four Pillars (Apr 5, 2009)

I love eating at the Keg - one of my faves.

Sorry, I don't have anything more intelligent to add.


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## Echo (Apr 1, 2011)

I love the structure of these trusts that just own the brand rights and receive a royalty back from each individual franchise. Whether times are good or bad, they get their 4% royalty. I think Boston Pizza is set up the same way as well.

And from what I hear, they send you a $50 gift card along with your financial statements each year.

They are dividend plays, not growth.


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## webber22 (Mar 6, 2011)

This trust distributes return of capital (ROC) in addition to eligible dividends. (Boston Pizza has 100% dividends). If held outside a registered account, the ROC is a pain to keep track of over time. Personally, I don't think it's worth risking your capital in this sector for an extra couple of %.


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## Betzy (Feb 7, 2011)

Ok newbie question maybe, but ROC distribution? What do you mean?


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## webber22 (Mar 6, 2011)

ROC - It is not considered income. You subtract it from your cost base, so at a latter date if you decide to sell, then you would pay any capital gains tax then.


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## Betzy (Feb 7, 2011)

Thanks Webber, one could also invest this fund in a TFSA and avoid all that messy accounting junk


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## liquidfinance (Jan 28, 2011)

Cut the payout this year though. Sure the yield is attractive but don't you want the payout to be increasing?


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## financialuproar (Jan 26, 2010)

liquidfinance said:


> Cut the payout this year though. Sure the yield is attractive but don't you want the payout to be increasing?


They cut the payout because of the switch from an income trust to a corporation. When they were a trust, they could pay distributions without having to pay tax first. The distributions were then taxed when investors collected them. Now they pay dividends, which are paid out from a corporation's after tax earnings. 

About the Keg... mmmm. That's all I got.


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## liquidfinance (Jan 28, 2011)

Ahh... That explains it then. I was thrown out by it still having a .UN listing although I hadn't actually investigated the stock other than a quick look at the 5yr chart on Google.


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## Retired at 31 (Apr 20, 2009)

webber22 said:


> This trust distributes return of capital (ROC) in addition to eligible dividends. (Boston Pizza has 100% dividends). If held outside a registered account, the ROC is a pain to keep track of over time. Personally, I don't think it's worth risking your capital in this sector for an extra couple of %.


Not true. BPF.UN does pay some ROC as well.


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## davisca86 (Jul 18, 2011)

Ok im new and this may be a beginner queston, how are dividends payed for such funds?


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## gibor365 (Apr 1, 2011)

Just came accross
The Keg Royalties Income Fund Announces Record Year-End Results
http://www.theglobeandmail.com/glob...20120326&archive=ccnm&slug=201203260777057001

I like The Keg food.... usually I was getting Gift card from Air miles points. Now they stopped contract with Airmiles. Probably they have too many customers w/o it ?! 
The stock is trading with 6.7% yield and reasonable P/E and P/B numbers. 
However, Payout ratio kinda high.
is anyone hold this stock? planning to buy?


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## Eclectic12 (Oct 20, 2010)

gibor said:


> Just came accross
> The Keg Royalties Income Fund Announces Record Year-End Results
> http://www.theglobeandmail.com/glob...20120326&archive=ccnm&slug=201203260777057001
> 
> ...


Technically, it lists as a trust and pays RoC, so I wouldn't call it a stock. 


However, if I were looking for alternatives to Boston Pizza, I'd definitely keep on eye on it.


Cheers


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## doctrine (Sep 30, 2011)

I like them as well, although it seems like they won't be able to increase distributions this year.. they earned $0.939 after taxes last year and paid out $0.96 in distributions... although their revenue was up nicely, so I'll be keeping an eye on it as well.


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## Eclectic12 (Oct 20, 2010)

Echo said:


> I love the structure of these trusts that just own the brand rights and receive a royalty back from each individual franchise. Whether times are good or bad, they get their 4% royalty. I think Boston Pizza is set up the same way as well.
> 
> And from what I hear, they send you a $50 gift card along with your financial statements each year.
> 
> They are dividend plays, not growth.


Wow! Now I'm really going to have to watch for the financial statements ... and something tasty with it!


Cheers


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