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  5. AW.UN: Hi team, Is there any hope of a price increase on CJR ? [A&W Revenue Royalties Income Fund]
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Investment Q&A

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Q: Hi team, Is there any hope of a price increase on CJR ? I own these shares at a loss in my TFSA, some of them when Shaw dumped theirs to the public 2 years ago. Dividend is good. I do not really need the money but is it dead money? Iím over 70 and am a bit worried about the market right now, so CJR might be safer than new or riskier purchases in the coming months? Thanks.

Asked by Denise on September 20, 2021
5i Research Answer:

CJR has certainly faced some industry headwinds and challenges over the past several years. Its most recent quarter was quite solid, with EPS beating estimates by 7% and revenue rising 15% year-over-year, but this is contrasted against several periods of negative growth. The dividend is good and it generates positive free cash flow. Debt is fairly high and liquidity is becoming a concern, but it does have good net profit margins. If one is primarily concerned with generating income, then it is OK and at a very cheap valuation. But we would not consider it a great stock for a conservative investor.  For a similar dividend yield, we would prefer to make a jump to a stock such as A&W Revenue Royalties (AW.UN) or TD Bank (TD), which both have good dividend yields and a strong history of capital appreciation.