Photo by Austin Distel on Unsplash
 

A&W Revenue Royalties Income Fund, ticker AWRRF, is a small cap British /Columbia-based restaurant company at work in the consumer cyclical business sector. It is, as I said, the fifth of five cyclical consumer candidates vying to be the fourth selection for my Viking folio. This is my first report on AWRRF for my Viking portfolio or any of my previous seven portfolios.

A&W Revenue Royalties Income Fund is a limited purpose trust established to invest in A&W Trade Marks Inc, which through its ownership interest in A&W Trade Marks Limited Partnership owns the A&W trade-marks used in the A&W quick service restaurant business in Canada.

The trust has granted A&W Food Services of Canada Inc, a license to use the A&W trade-marks to market Root Beer in cans and bottles to the retail grocery trade as well as its acts as a franchisor of hamburger quick-service restaurants in Canada.

As of January 2, 2022, the company had 1,029 A&W restaurants, including 1,019 restaurants owned and operated by owner/operators under franchise agreements with Food Services, and ten are owned and operated by Food Services.

A&W Revenue Royalties Income Fund was founded in 2001 and is based in North Vancouver, Canada.

Three key data points gauge A&W Revenue Royalties Income Fund:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.
 

AWRRF Price

A&W’s price per share was $24.09 at Thursday’s market close. However, in the past year, AWRRF’s share price fell by $8.22, or about 25%.

If A&W’s stock trades in the range of $20.00 to $35.00 this next year, it's recent $24.09 per share price might reach $25.20 by next year. My upside increase estimate of $1.11 is about aqua to the average annual price used for AWRRF stock over the past 14 years.
 

AWRRF Dividends

A&W Revenue Royalties Income Fund’s most recently declared monthly dividend of $0.11 per share equals $1.35 annually and casts a yield of 5.59%.
 

AWRRF Returns

Adding the $1.35 annual AWRRF dividend to my one-year price upside estimate of $1.11 shows a $2.35 potential gross gain per share.

At Thursday’s $24.09 closing price, a little over $1000 would buy 42 shares.

A $10 broker fee (if charged), paid half at purchase and a half at the sale, might cost us $0.24 per share.

Subtracting that maybe $0.24 brokerage cost from my estimated $2.35 gross gain per share results in a net gain of $2.21 X 42 shares = $92.82 for a 9.2% net gain including a 5.59% annual yield.

In a year, our $1K investment in A&W Revenue Royalties Income Fund shares could generate $55.90 in cash dividends. Of course, a single share of AWRRF stock at today's $24.09 share price is more than 2.25 times less than the annual dividend income from our $1000.00 investment.

So, by my dogcatcher ideal, this is really a good time to buy AWRRF shares based on their dividends for the year 2022. The dividend from $1K invested is 2.32 times more than AWRRF’s single share price. Consider yourself alerted. Now IS the time for A&W Revenue Royalties Income Fund.

All of the estimates above are speculation based on the past history of the A&W Revenue Royalties Income Fund. Only time and money invested in this stock will determine its market value.

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