Recent Sale: Pizza Pizza

pizza-pizza-office

 

Hi everyone I recently sold one of my stocks Pizza Pizza Royalty Corp and I thought I would share that with you.

About Pizza Pizza

Pizza Pizza Royalty Corp. owns the trademarks and trade names used by Pizza Pizza Limited (PPL) in its Pizza Pizza and Pizza 73 restaurants. PPL operates its Pizza Pizza Restaurants as franchise oriented restaurants and Pizza 73 Restaurants are owned, and operated as independent businesses. It operates through receipt of royalty income from the ownership of the Pizza Pizza and Pizza 73 Rights and Marks segment. Pizza Pizza is a franchise-oriented restaurant business operating in the province of Ontario in which it dominates the pizza quick service restaurant (QSR) segment. Pizza Pizza Restaurants operate in Ontario, Quebec, Saskatchewan, Manitoba and Nova Scotia. There are approximately 100 Pizza 73 locations operating in the QSR segment, in the province of Alberta. Pizza 73 has over five traditional locations outside of Alberta; approximately three in Saskatchewan, and over two in British Columbia. The Pizza 73 business also includes over two central food distribution centers.

Source: RBC Direct Investing

Why?

Why did I sell? That is an excellent question! First off it wasn’t an easy decision as I have held Pizza Pizza Royalty Corp shares for years. But I have been keeping an eye on the stock the past few quarters and same store sales which is a key metric has been close to zero or starting to drop. A couple of weeks ago when they released their quarterly report sales were down a combined 3.3%, Pizza Pizza down 3.5% and Pizza 73 down 1.7%. Also the company has been hit by Ontario and Alberta raising their minimum wage. Another key reason I believe for declining sales is there are so many healthy alternatives now a days people maybe shying away from pizza.

The company currently has a 3 to 5 year plan to turn the business around but I didn’t want to wait that long to see if it works or not. Also the dividend payout ratio was over 100%. I think the dividend is safe for the time being but down the road if sales don’t improve it could potentially get cut.

Income

On September 4th I sold all 242 shares of the stock, I sold the shares @$10. My average cost was $13.54 so I was down 25.79% or $845.06. That is not including dividends. I received a total of $760.98 in dividends from the company so I almost broke even.

With this sale I will lose an expected $208.12 in annual dividend income, but I will have peace of mind and I can help diversify my portfolio further with the funds from the sale.

 

So what do you think? Do you own this stock? Would you sell or possibly buy on the downturn? I look forward to hearing what you have to say.

Next Tuesday I will share with you what I purchased with the funds from the sale.

Thanks for reading

Matthew

Recent Sale

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5 thoughts on “Recent Sale: Pizza Pizza

  1. sucks to sell stocks at a loss, but if the business aint doing to well. why not?

    look at a and w after they brought the beyond meat burger. companies will adapt. Problem with pizza companies is they seem so easy to start. So much competition out there.

    look forward to seeing where you divert this cash.

    cheers

    Liked by 1 person

  2. I own it in a trading account. 285 shares with an ACB around $15.60. I did not set a stop loss.

    Royalties are paid to the Pizza Pizza Royalty Corp before taxes and such other business expenses. I believe they have a sort of an account that allows them to keep paying the dividend in negative times without cutting it. The prices of their food being raised to help pay for minimum wage increases definitely has a negative effect. With the prices rising, some customers will get ticked off and either eat more at home or go somewhere else where they feel better value for their money.

    I think they should make their pizzas bigger size or more toppings. That would attract customers.

    Liked by 1 person

  3. I’m confident Pizza Pizza will find a way to right the ship. It might take a few years but investing rewards the patient. I continue to hold my shares and will collect the nice yield while I wait.

    Liked by 1 person

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