Pizza Pizza Royalty Corp
Is it a good company at a reasonable price? The company just cut its dividend. This is never a good sign. It is not a good sign when analysts lose interest in a stock. I do not like the fact that you have to analyze two companies and this makes things complicated. I do not like complicated. The stock price is testing as reasonable, but that does not mean that it is a good stock to buy. It would not be one I would be interested in.
I do not own this stock of Pizza Pizza Royalty Corp (TSX-PZA, OTC-PZRIF). A number of people have recommended this stock, so I decided to take a look at it. It was on once on John Heinzl’s Dividend Hog Portfolio, but has been taken off.
When I was updating my spreadsheet, I noticed what I have always disliked about this stock. It is complicated. I do not complicated when it comes to investing. This stock’s financials do not mean much if the base company, Pizza Pizza Limited is not doing well. Pizza Pizza Limited does not seem doing ok as Net Income is up over the past 5 years (but down over the past 10 years). I do not like complicated as it is too easy to miss something important.
If you had invested in this company in December 2015, for $1,010.10 you would have bought 74 shares at $13.65 per share. In December 2025, after 10 years you would have received $615.35 in dividends. The stock would be worth $1,155.14. Your total return would have been $1,770.49. This would be a total return of 7.10% per year with 1.35% from capital gain and 5.75% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $13.65 | $1,010.10 | 74 | 10 | $615.35 | $1,155.14 | $1,770.49 |
The current dividend yield is good with dividend growth suspended. The current dividend yield is good (5% to 6% ranges) at 6.37%. The 5, 10 and historical dividend yields are also good at 6.39%, 6.42% and 6.86%. The dividend was recently cut by 13%.
The Dividend Payout Ratios (DPR) are high, but this Royalty Corp can afford to pay all their make in dividends. The DPR for 2025 for Earnings per Share (EPS) is high at 99% with 5 year coverage at 95%. The DPR for 2025 for Adjusted Earnings per Share (AEPS) is high at 98% with 5 year coverage at 93%. The DPR for 2025 for Cash Flow per Share (CFPS) is high at 98% with 5 year coverage at 92%. The DPR for 2025 for Free Cash Flow (FCF) is high at 106% with 5 year coverage at 100%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 98.83% | 94.83% |
| AEPS | 97.79% | 92.64% |
| CFPS | 97.56% | 92.71% |
| FCF | 106.42% | 100.23% |
Debt Ratios are for PZA are good. The Long Term Debt/Market Cap Ratio for 2025 is good at 0.09 and currently at 0.11. The Liquidity Ratio for 2025 is good at 2.06 and 1.64 currently. The Debt Ratio for 2025 is good at 4.99 and 5.06 currently. The Leverage and Debt/Equity Ratios for 2025 are good at 1.74 and 0.35 and currently at 1.79 and 0.35.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term | 0.09 | 0.11 |
| Intang/GW | 0.71 | 0.88 |
| Liquidity | 2.06 | 1.64 |
| Liq. + CF | 2.32 | 2.46 |
| Debt Ratio | 4.99 | 5.06 |
| Leverage | 1.74 | 1.79 |
| D/E Ratio | 0.35 | 0.35 |
Debt Ratios are for Pizza Pizza Limited need improving, but long term debt is gone. The Long Term Debt/Market Cap Ratio for 2025 is fine at 0.74 and currently at 0.00. The Liquidity Ratio for 2025 is too low at 0.87 and 0.91 currently. If you added in Cash Flow after dividends, the ratios are still too low at 0.94 and currently at 0.88. The Debt Ratio for 2025 is low at 1.28 and 1.28 currently. The Leverage and Debt/Equity Ratios for 2025 are fine at 2.72 and 1.72 and currently at 0.00 and 0.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term | 0.74 | 0.00 |
| Intang/GW | 0.00 | 0.00 |
| Liquidity | 0.87 | 0.91 |
| Liq. + CF | 0.94 | 0.88 |
| Debt Ratio | 1.28 | 1.28 |
| Leverage | 2.72 | 0.00 |
| D/E Ratio | 1.72 | 0.00 |
The Total Return per year is shown below for years of 5 to 20 to the end of 2025. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below. Note that the stock is down 19% so far this year.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2020 | 5 | 6.15% | 18.55% | 11.15% | 7.40% |
| 2015 | 10 | 1.36% | 7.10% | 1.35% | 5.75% |
| 2010 | 15 | 0.00% | 11.75% | 4.22% | 7.53% |
| 2005 | 20 | 0.99% | 9.36% | 2.25% | 7.11% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 13.40, 14.83 and 16.39. The corresponding 10 year ratios are 13.28, 14.69 and 16.48. The corresponding historical ratios are 13.17, 14.83 and 16.57. The current ratio is 12.84 based on a stock price of $12.71 and EPS estimate for 2026 of $0.99. The current ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively cheap.
I also have Adjusted Earning per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 13.05, 14.54 and 15.74. The corresponding 10 year ratios are 13.02, 14.46 and 15.94. The corresponding historical ratios are 12.11, 14.27 and 15.71. The current ratio is 13.97 based on a stock price of $12.71 and AEPS estimate for 2026 of $0.91. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $11.38. The 10-year low, median, and high median Price/Graham Price Ratios are 0.97, 1.14 and 1.28. The current ratio is 1.12 based on a stock price of $12.71. The current ratio is between the low and median ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Book Value per Share Ratio of 1.93. The current P/B Ratio is 2.01 based on a Book Value of $213.8M, Book Value per Share of $6.32 and a stock price of $12.71. The current ratio is 4% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 14.23. The current ratio is 13.57 based on Cash Flow for the last 12 months of $31.7M, Cash Flow per Share of $0.94 and a stock price of $12.71. The current ratio is 5% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 6.86%. The current dividend yield is 6.37% based on a stock price of $12.71 and Dividends of $0.81. The current ratio is 7% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median dividend yield of 6.42%. The current dividend yield is 6.37% based on a stock price of $12.71 and Dividends of $0.81. The current ratio is 0.7% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and at the median.
The 10-year median Price/Sales (Revenue) Ratio is 11.46. The current Ratio is 10.62 based on Operating Income for PZA for the last 12 months of $40.5M, Operation Income per Share of $1.20 and a stock price of $12.71. The current ratio is 7% below the 10 year median ratio. Operation Income for PZA is the closes thing this stock has for revenue.
Results of stock price testing is that the stock price is probably reasonable. The 10 dividend yield test say that the stock price is reasonable and at the median. The P/S Ratio test says the stock price is reasonable and below the median. The rest of the testing varies from cheap to reasonable but above the median.
When I look at analysts’ recommendations, I find Hold (1) only. The consensus would be a Hold. The 12 month stock price consensus is $12.00 with a high of $12.00 and low of $12.00. There seems to be only one analyst following this stock. The 12 month stock price consensus of $12.00 implies a total return of 0.79% with 5.59% capital loss and 6.37% from dividends
There is only one entry for 2026 on Stock Chase and analysts says clients happy with dividends. Before that there were entries in 2024. It was thought to be range bound and good for income. Stock is not well followed lately. Amy Legate-Wolfe on Motley Fool likes the dividend but warns of possible risks due to dividend cut and falling sales. Daniel Da Costa on Motley Fool thinks that the dividend cut was the right move for this company and it is a good time to buy the stock now. The company put out a Press Release about their fourth quarter of 2025 results. The company put out a Press Release about their first quarter of 2026.
The company’s dividend cut is announced on Newswire. Simply Wall Street has one warning on this stock of dividend of 7.29% is not well covered by earnings or free cash flows.
Pizza Pizza Royalty Corp through its subsidiary, Pizza Pizza Royalty Limited Partnership, owns and franchises quick-service restaurants under the Pizza Pizza and Pizza 73 brands. It receives the benefit of Pizza Pizza Royalty and Pizza 73 Royalty payable by PPL under the Pizza Pizza Licence and Royalty Agreement and the Pizza 73 Licence and Royalty Agreement, respectively, as well as royalty payments under the international agreement, indirectly through its interests in the partnership. Its web site is here Pizza Pizza Royalty Corp.
The last stock I wrote about was about was Hammond Power Solutions Inc (TSX-HPS.A, OTC-HMDPF) … learn more. The next stock I will write about will be HLS Therapeutics Inc (TSX-HLS, OTC-HLTRF) … learn more on Monday, June 8, 2026 around 5 pm.
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