SIR Royalty Income (SRV.UN) AI Stock Analysis

• Market Cap: N/A
• Dividend Yield: 7.99%
• Average Volume (3M): 4.11K
• Price to Earnings (P/E): 16.6
• Beta (1Y): 0.44
• Revenue Growth: N/A
• EPS Growth: -62.68%
• Country: CA
• Employees: 5,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 0.13
• Shares Outstanding: 8,375,567
• 10 Day Avg. Volume: 4,856
• 30 Day Avg. Volume: 4,112
• PEG Ratio: -0.25
• Price to Book (P/B): 1.26
• Price to Sales (P/S): 10.37
• P/FCF Ratio: 10.86
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: C$16.00 ▲(8.84% Upside)

Overall score is driven primarily by a conservative, low-debt balance sheet and steady positive cash generation, supporting financial resilience. Valuation is also supportive with a moderate P/E and a high dividend yield. Offsetting these positives are pronounced revenue volatility (raising earnings quality concerns) and technical momentum that appears near overbought levels.

Positive Factors

Strong Equity Position

A strong equity position with no debt enhances financial stability and provides flexibility for future investments or expansions.

Stable Income Stream

The royalty-based revenue model ensures a stable income stream, aligning the fund's performance with the operational success of SIR Corp.'s restaurant brands.

Improved Cash Flow Generation

Improved cash flow generation indicates better operational efficiency, providing more resources for reinvestment or distribution to shareholders.

Negative Factors

Revenue Volatility

Revenue volatility can undermine financial predictability and may challenge the company's ability to maintain consistent growth and profitability.

Inconsistent Profit Margins

Fluctuating profit margins suggest challenges in cost management, which can impact long-term profitability and competitiveness.

Ongoing Financial Outflows

Persistent financial outflows may strain liquidity, limiting the company's ability to invest in growth opportunities or weather economic downturns.

SIR Royalty Income Business Overview & Revenue Model

Company Description

SIR Royalty Income Fund, through SIR Royalty Limited Partnership, owns service inspired restaurants in Canada. The company operates concept restaurant brands under the Jack Astor's Bar and Grill, Scaddabush Italian Kitchen & Bar, and Canyon Creek Chop House; and signature restaurants under the Reds Wine Tavern, Reds Midtown Tavern, Reds Square One, and The Loose Moose Tap & Grill brands. It also owns and operates two Duke's Refresher & Bar in downtown Toronto; and a seasonal restaurant under the Abbey's Bakehouse name in Muskoka, Ontario, as well as an Abbey's Bakehouse retail outlet. As of December 31, 2021, it owned and operated a portfolio of 51 concept and signature restaurants. The company was incorporated in 2004 and is headquartered in Burlington, Canada.

How the Company Makes Money

SIR Royalty Income Fund generates revenue primarily through royalty payments received from SIR Corp. The fund receives a percentage of the revenue generated by the restaurants owned and operated by SIR Corp. This royalty payment is based on the gross sales of the restaurants, providing the fund with a stable income stream. Additionally, the fund's earnings are influenced by the overall performance and sales growth of the SIR Corp. restaurant brands. The fund has a strategic partnership with SIR Corp., which allows it to benefit from the operational expertise and brand recognition of the restaurant chains. As SIR Corp. expands or enhances its restaurant operations, the fund's potential for income growth increases, thereby benefiting its investors.

SIR Royalty Income Financial Statement Overview

Summary

Strong balance sheet with essentially no leverage and stable equity, plus consistently positive operating and free cash flow (improving in 2024). The key risk is earnings durability due to highly volatile revenue, including a sharp 2024 decline versus 2023 and a negative revenue year in 2020.

Income Statement

Profitability appears unusually strong on the surface, with very high net income margins and solid EBIT margins in most years, and a clear recovery from the 2020 loss to strong profits in 2021–2024. However, revenue has been highly volatile, including a sharp drop in 2024 versus 2023 and even a negative revenue year in 2020, which raises questions about earnings quality and the consistency of the underlying business model.

Balance Sheet

The balance sheet is conservatively positioned with essentially no leverage (debt-to-equity near zero across the period) and a stable equity base. Returns on equity have generally been positive and at times very strong (notably 2022–2023), though the 2020 loss drove a deeply negative return that highlights sensitivity to shocks despite low debt.

Cash Flow

Cash generation is consistently positive, with operating cash flow and free cash flow remaining solid across years and improving in 2024 versus 2023. Cash flow has also covered accounting earnings well in the years shown, but free cash flow growth has been uneven (declining in 2020 and 2023), reflecting some variability in cash performance.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.75M	10.66M	23.32M	40.95M	4.12M	-42.73M
Gross Profit	14.75M	16.16M	23.32M	48.95M	7.12M	-56.98M
EBITDA	3.42M	4.90M	11.66M	7.37M	2.43M	-14.77M
Net Income	10.51M	12.03M	19.11M	44.41M	4.91M	-44.00M
Balance Sheet
Total Assets	94.22M	94.26M	90.96M	83.22M	49.48M	48.49M
Cash, Cash Equivalents and Short-Term Investments	1.08M	1.04M	412.18K	2.28M	1.41M	138.63K
Total Debt	0.00	0.00	42.47K	63.48K	42.26K	46.36K
Total Liabilities	6.46M	6.30M	5.47M	6.95M	6.90M	5.79M
Stockholders Equity	87.76M	87.96M	85.48M	76.27M	42.59M	42.70M
Cash Flow
Free Cash Flow	9.46M	10.18M	8.04M	11.58M	6.30M	2.20M
Operating Cash Flow	9.46M	10.18M	8.04M	11.58M	6.30M	2.20M
Investing Cash Flow	0.00	0.00	0.00	0.00	0.00	0.00
Financing Cash Flow	-9.55M	-9.55M	-9.90M	-10.72M	-5.03M	-2.20M

SIR Royalty Income Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.70
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SRV.UN, the sentiment is Positive. The current price of 14.7 is below the 20-day moving average (MA) of 15.35, above the 50-day MA of 14.58, and above the 200-day MA of 13.76, indicating a bullish trend. The MACD of 0.28 indicates Positive momentum. The RSI at 68.18 is Neutral, neither overbought nor oversold. The STOCH value of 56.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:SRV.UN.

SIR Royalty Income Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BPF.UN	79 Outperform	―	13.56	13.06%	6.19%	4.43%	23.32%
QSP.UN	73 Outperform	C$40.18B	23.43	25.66%	3.58%	19.92%	-18.34%
PZA	73 Outperform	C$543.66M	17.35	10.19%	5.98%	1.35%	-1.11%
SRV.UN	72 Outperform	―	16.63	9.03%	7.99%	―	-62.68%
MTY	68 Neutral	C$987.89M	30.28	3.64%	3.51%	1.38%	-64.10%
AW	62 Neutral	C$895.60M	31.77	57.97%	5.07%	-2.54%	-10.57%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%