TSX:PZA

Stock Analysis Report

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Executive Summary

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 in Canada.


Snowflake Analysis

Excellent balance sheet and fair value.


Similar Companies

Share Price & News

How has Pizza Pizza Royalty's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PZA has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.1%

PZA

2.0%

CA Hospitality

0.8%

CA Market


1 Year Return

-16.6%

PZA

-45.8%

CA Hospitality

-11.3%

CA Market

Return vs Industry: PZA exceeded the Canadian Hospitality industry which returned -45.9% over the past year.

Return vs Market: PZA underperformed the Canadian Market which returned -11.3% over the past year.


Shareholder returns

PZAIndustryMarket
7 Day-0.1%2.0%0.8%
30 Day-5.5%-6.2%1.8%
90 Day-4.7%2.6%9.5%
1 Year-9.1%-16.6%-44.9%-45.8%-8.2%-11.3%
3 Year-39.0%-51.6%-24.4%-27.9%4.1%-5.8%
5 Year-16.2%-40.5%-21.4%-27.4%21.6%3.2%

Price Volatility Vs. Market

How volatile is Pizza Pizza Royalty's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Pizza Pizza Royalty undervalued compared to its fair value and its price relative to the market?

39.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PZA (CA$8.24) is trading below our estimate of fair value (CA$13.69)

Significantly Below Fair Value: PZA is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: PZA is poor value based on its PE Ratio (9.8x) compared to the CA Hospitality industry average (9.5x).

PE vs Market: PZA is good value based on its PE Ratio (9.8x) compared to the Canadian market (13.2x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate PZA's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: PZA's PB Ratio (0.9x) is in line with the CA Hospitality industry average.


Next Steps

Future Growth

How is Pizza Pizza Royalty forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

40.0%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if PZA's forecast earnings growth is above the savings rate (1.7%).

Earnings vs Market: Insufficient data to determine if PZA's earnings are forecast to grow faster than the Canadian market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: PZA's revenue (40% per year) is forecast to grow faster than the Canadian market (5.5% per year).

High Growth Revenue: PZA's revenue (40% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if PZA's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Pizza Pizza Royalty performed over the past 5 years?

1.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PZA has high quality earnings.

Growing Profit Margin: PZA's current net profit margins (75.9%) are higher than last year (75.7%).


Past Earnings Growth Analysis

Earnings Trend: PZA's earnings have grown by 1.6% per year over the past 5 years.

Accelerating Growth: PZA's earnings growth over the past year (0.4%) is below its 5-year average (1.6% per year).

Earnings vs Industry: PZA earnings growth over the past year (0.4%) underperformed the Hospitality industry 0.4%.


Return on Equity

High ROE: PZA's Return on Equity (9.4%) is considered low.


Next Steps

Financial Health

How is Pizza Pizza Royalty's financial position?


Financial Position Analysis

Short Term Liabilities: PZA's short term assets (CA$5.5M) exceed its short term liabilities (CA$2.9M).

Long Term Liabilities: PZA's short term assets (CA$5.5M) do not cover its long term liabilities (CA$70.1M).


Debt to Equity History and Analysis

Debt Level: PZA's debt to equity ratio (16.4%) is considered satisfactory.

Reducing Debt: PZA's debt to equity ratio has reduced from 17.7% to 16.4% over the past 5 years.

Debt Coverage: PZA's debt is well covered by operating cash flow (61%).

Interest Coverage: PZA's interest payments on its debt are well covered by EBIT (26.9x coverage).


Balance Sheet


Next Steps

Dividend

What is Pizza Pizza Royalty current dividend yield, its reliability and sustainability?

7.28%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: PZA's dividend (7.28%) is higher than the bottom 25% of dividend payers in the Canadian market (1.87%).

High Dividend: PZA's dividend (7.28%) is in the top 25% of dividend payers in the Canadian market (6.03%)


Stability and Growth of Payments

Stable Dividend: PZA's dividends per share have been stable in the past 10 years.

Growing Dividend: PZA's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (102%), PZA's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.2yrs

Average board tenure


CEO

Pizza Pizza Royalty has no CEO, or we have no data on them.


Board Members

NamePositionTenureCompensationOwnership
Edward Peter Nash
Independent Director4.17yrsCA$38.00k0.0080% CA$21.3k
Jay Swartz
Independent Chair of the Board of Directorsno dataCA$45.29k0.036% CA$94.8k
Kathryn Welsh
Independent Corporate Director4.17yrsCA$45.50k0.017% CA$45.3k
Michelle Savoy
Independent Corporate Director4.67yrsCA$37.00k0.0031% CA$8.2k
Neil Lester
Corporate Director0.92yrno data0.0062% CA$16.5k

4.2yrs

Average Tenure

Experienced Board: PZA's board of directors are considered experienced (4.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: PZA insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Pizza Pizza Royalty Corp.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Pizza Pizza Royalty Corp.
  • Ticker: PZA
  • Exchange: TSX
  • Founded: 1967
  • Industry: Restaurants
  • Sector: Consumer Services
  • Market Cap: CA$265.141m
  • Shares outstanding: 32.18m
  • Website: https://www.pizzapizza.ca

Location

  • Pizza Pizza Royalty Corp.
  • 500 Kipling Avenue
  • Toronto
  • Ontario
  • M8Z 5E5
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PZATSX (The Toronto Stock Exchange)YesCommon SharesCACADJul 2005
PZRI.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJul 2005

Biography

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 in Canada. As of January 1, 2020, the company had 749 restaurants in the royalty pool. Pizza Pizza Royalty Corp. was founded in 1967 and is headquartered in Toronto, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/13 00:01
End of Day Share Price2020/07/10 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.