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  5. AW.UN: Is QSR still a buy at this level? [A&W Revenue Royalties Income Fund]
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Investment Q&A

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Q: Is QSR still a buy at this level? Do you have a preference between it and AW for a 5-year hold?

Thanks.
Asked by Alan on May 05, 2023
5i Research Answer:

We prefer QSR given the strong brand name and near-term catalysts with its new Chairman (see below).

Firstly, the company started repurchasing shares recently for the very first time as they believe shares are undervalued. Also, the appointment of Patrick Doyle - former CEO of DPZ, who has a track record of value creation for shareholders. During his time at DPZ from 2010 to 2017, shares of DPZ grew more than 10 folds, from $13 to $172. Lastly, revenue has accelerated into double-digits across brands in recent operating results. The fundamental momentum reflects somewhat in the multiples which are now in line with peers.
AW.UN is a good income name and consistently grows the business organically and pays out increasing distributions. However, due to the reasons mentioned above, and the much smaller size of AW at this time we would side with QSR.