Up to date on Could seventh, 2026 by Nathan Parsh
Pizza Pizza Royalty Corp. (PZRIF) has two interesting funding traits:
#1: It’s a high-yield inventory based mostly on its 6.3% dividend yield.
Associated: Checklist of 5%+ yielding shares.
#2: It pays dividends month-to-month as an alternative of quarterly.
Associated: Checklist of month-to-month dividend shares
You may obtain our full Excel spreadsheet of all month-to-month dividend shares (together with metrics that matter, like dividend yield and payout ratio) by clicking on the hyperlink under:
The mix of a excessive dividend yield and a month-to-month dividend makes Pizza Pizza Royalty Corp. interesting to income-oriented buyers. As well as, the corporate has a strong enterprise mannequin, with most of its revenues recurring. On this article, we are going to talk about Pizza Pizza Royalty Corp’s prospects.
Desk of Contents
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Enterprise Overview
Pizza Pizza Royalty Corp is a Canadian firm that operates within the restaurant trade, primarily via its two manufacturers, Pizza Pizza and Pizza 73. Pizza Pizza Royalty Corp is a novel entity within the Canadian inventory market, because it operates as a royalty-based revenue belief construction.
Pizza Pizza, based in 1967, is a well known and established pizza chain in Canada, with a robust presence in Ontario, the place it originated. Pizza 73, based in 1985, is a pizza supply and takeout model specializing in Western Canada, notably Alberta and British Columbia.
As a royalty-based revenue belief, Pizza Pizza Royalty Corp doesn’t function the eating places immediately however as an alternative earns royalties from franchisees who function Pizza Pizza and Pizza 73 places. The corporate’s income is primarily generated from royalty funds based mostly on a proportion of franchisee gross sales. This distinctive enterprise mannequin permits Pizza Pizza Royalty Corp to generate income with out immediately bearing the prices and dangers related to working eating places, akin to labor, hire, and meals prices.
Supply: Investor Presentation
Pizza Pizza Royalty Corp’s income and profitability are immediately tied to the efficiency of its franchisees. The corporate’s monetary success is dependent upon elements akin to franchisee gross sales, the variety of eating places in operation, and total shopper demand for pizza and fast-food choices.
One of many notable options of Pizza Pizza Royalty Corp is its historical past of paying month-to-month dividends to its shareholders, which has made it a horny funding for income-seeking buyers. Nonetheless, it’s essential to notice that dividend funds should not assured and might be topic to alter based mostly on numerous elements, together with the corporate’s monetary efficiency and administration selections.
Pizza Pizza Royalty Corp. reported monetary outcomes for Q1 2025 on Could 1st, 2026, with same-store gross sales declining 4.1%. Royalty Pool system gross sales dropped 3.6% through the interval whereas adjusted EPS decreased 6.1%. Regardless of mushy shopper demand and elevated competitors, the corporate added seven web new places to its eating places community through the quarter and 20 web eating places to its Royalty Pool.
Pizza Pizza model gross sales fell 4.1% to $124.5 million and Pizza 73 gross sales have been decrease by 0.9% to $21.3 million. Similar retailer gross sales declines have been partially offset by new eating places added to the enterprise. Working capital reserves fell to $2.3 million as a result of diminished royalty revenue. The corporate famous that the newest quarter is mostly been the weakest portion of the 12 months.
Development Prospects
The corporate has a historical past of selectively opening new places and dealing with present franchisees to renovate and improve present eating places to satisfy altering shopper calls for and market traits.
Nonetheless, it’s value noting that the restaurant trade, like many different sectors, might be topic to challenges akin to altering shopper preferences, aggressive pressures, and financial fluctuations. Moreover, the franchise enterprise mannequin comes with dangers associated to the efficiency of particular person franchisees, potential authorized and regulatory modifications, and different operational challenges.
Supply: Investor Presentation
Dividend & Valuation Evaluation
Pizza Pizza Royalty Corp. presents an exceptionally excessive dividend yield of 6.3%, which is almost six occasions the 1.1% yield of the S&P 500. The inventory is thus an attention-grabbing candidate for income-oriented buyers. Nonetheless, U.S. buyers must be conscious that their dividend is affected by the prevailing alternate fee between the Canadian greenback and the USD.
The corporate’s coverage is to distribute all obtainable money to maximise returns to shareholders over time after permitting for affordable reserves. Regardless of seasonal variants inherent to the restaurant trade, the corporate’s coverage is to make equal dividend funds to shareholders month-to-month to clean out revenue to shareholders.
The corporate has a really wholesome stability sheet.
The present dividend yield of 6.3% is decrease than its five-year dividend yield common of greater than 7%. Thus, based mostly on the dividend yield common, the corporate seems to be barely overvalued on the present worth.
Supply: Investor Presentation
Concerning valuation, the corporate seems overvalued as a result of its present PE of 15.8x earnings is barely larger than historic common. We imagine 14x earnings is a extra acceptable valuation for the inventory. Based mostly on 2025 earnings expectations of $0.66 per share, the corporate’s honest worth worth is $9.24 per share. At present, the corporate is buying and selling arms for $10.41 per share. Reverting to our goal valuation would scale back annual returns by 2.4% via 2031.
We venture that EPS will develop at 1% yearly over the following 5 years. Mixed with the dividend yield and anticipated a number of compression, whole returns may very well be 4.7% per 12 months via 2031.
Closing Ideas
In conclusion, Pizza Pizza Royalty Corp is a novel firm within the Canadian restaurant trade. It operates as a royalty-based revenue belief specializing in pizza manufacturers. Its enterprise mannequin depends on producing income from royalty funds from franchisees, and it has a historical past of paying rising month-to-month dividends to shareholders.
The corporate’s success is carefully tied to the efficiency of its franchisees and total shopper demand for pizza and fast-food choices. We fee shares a promote because of the lack of dividend development over the long-term.
As with all funding, conducting thorough analysis, reviewing monetary statements, and consulting with a certified monetary skilled is crucial earlier than making funding selections associated to Pizza Pizza Royalty Corp or some other firm.
Don’t miss the assets under for extra month-to-month dividend inventory investing analysis.
And see the assets under for extra compelling funding concepts for dividend development shares and/or high-yield funding securities.
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