Pizza Pizza Royalty: I'm Not Taking A Bite At Current Valuations

Philipp Brohl764 FollowersFollow5ShareSavePlay(9min)CommentsSummaryPizza Pizza Royalty is a straightforward, highly cash-generative business focused on the Canadian market.With very little growth over the last 20 years, the dividend is the dominant driver of total returns.Low-growth businesses should be bought at low valuations.

Pizza Pizza Royalty is trading near record-high valuation levels and record-low dividend yields.The company isn't shielded from competition, and the current valuation doesn't offer a margin of safety. I therefore rate the stock a "Sell" at current valuations. Vasil Dimitrov/iStock via Getty Images What's not to love about easy-to-understand businesses that are highly cash generative and distribute monthly dividends?

Pizza Pizza Royalty (PZA:CA)(PZRIF), to which I'll refer as Pizza Pizza, is such a business. The company mostlyThis article was written byPhilipp Brohl764 FollowersFollowPhilipp is a seasoned value investor with nearly 20 years of experience in the field. He takes a global approach to investment opportunities, seeking out undervalued companies that offer a significant margin of safety, leading to attractive dividend yields and returns. While he does not limit his investments to specific sectors or countries, he focuses only on companies he thoroughly understands and can reasonably assess for future growth potential. Philipp is particularly enthusiastic when he identifies a company with a solid earnings track record trading at less than 8x free cash flow, which inspired his username: 8xfreecash.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.