Monthly Dividend Stock In Focus: SIR Royalty Income Fund

Updated on May 20th, 2026 by Nathan Parsh

SIR Royalty Income Fund (SIRZF) has two appealing investment characteristics:

#1: It is a high-yield stock based on its 7.9% dividend yield.

#2: It pays dividends monthly instead of quarterly.Related: List of monthly dividend stocks

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Thanks to its high yield and monthly dividend payments, SIR Royalty Income Fund has the potential to be an excellent income investment.

Business Overview

Source: Investor Presentation

SIR Royalty Income Fund reported that SIR Corp.’s Q4 2025 pool revenues increased 17.4% year-over-year to $73.1 million, supported by stronger same-store sales and new restaurant openings. One restaurant were added to the Royalty Pool.

Same-store sales grew 8.0% for the quarter, led by Signature, the smallest restaurant group, at 8.9%. Jack Astor’s grew 8.7% and Scaddabush was up 6.0%. Net earnings of $2.8 million, or $0.33 per share, compared to $2.2 million, or $0.26 per share, in Q4 2024.

Growth was driven by a long playoff run and World Series appearance by the Toronto Blue Jays baseball team, which drove more in-store customer activity in the key Toronto market. That sort of good luck is hard to forecast, but we do expect that 2026 earnings will rise due to plans to open as many as four new restaurant locations.

Looking ahead, SIR is managing inflation, wage pressures, and supply costs while growing takeout and dine-in services. We project earnings growth of 2.0% annually through 2031.

Growth Prospects

SIR Royalty Income Fund’s growth is closely tied to SIR Corp.’s ability to expand its restaurant network and improve existing operations. In 2024, SIR added four new locations—including three Scaddabush restaurants and Edna + Vita in Toronto—which were added to the Royalty Pool in early 2025. These additions helped to boost royalty income and broaden the Fund’s revenue base.

SIR plans to open three more Scaddabush locations in Windsor, Aurora, and Kanata, Ontario, while continuing to invest in its current restaurants. By the end of 2025, SIR had completed renovations at 16 locations, including several Jack Astor’s. These upgrades are designed to modernize the dining experience, increase guest traffic, and enhance long-term sales performance.

Despite challenges like inflation and rising labor costs, SIR remains focused on innovation and flexibility. The company is strengthening its takeout and delivery offerings and improving dine-in service. In addition, recent credit agreement amendments provide more financial leeway, allowing SIR to continue investing in growth while navigating economic uncertainty.

Source: Investor Presentation

Dividend & Valuation Analysis

The company maintains a consistent monthly dividend policy, with an annualized payout of approximately US$0.90 per unit, yielding 7.9% at current levels. The Fund’s distributions are primarily funded through royalty income from SIR Corp.’s restaurant operations and interest income from the SIR Loan.

The Fund’s dividend payout ratio stands at approximately 86% of earnings, indicating a sustainable distribution level. However, the cash payout ratio has been at 100% in recent years, suggesting that the Fund may distribute more cash than it generates. This highlights the importance of ongoing operational performance and efficient cash flow management to maintain dividend stability.

SIR Royalty Income Fund’s dividend yield is notably higher than the Canadian market average, placing it among the top quartile of dividend-paying entities. The Fund’s ability to sustain its dividend is closely tied to SIR Corp.’s operational success and the overall health of the restaurant industry. Investors should monitor these factors to assess the potential for continued dividend payments.

Shares of SIR Royalty Income Fund are trading at 10.8x expected earnings-per-share for the year, which is above our target of 10.0. Reverting to our target P/E by 2031 would reduce annual returns by 1.6% over this period.

In total, we project annual returns of 7.6% through 2031. Our forecast stems from 2% earnings growth and the starting yield of 7.9%, offset by a low single-digit headwind from multiple contraction. We rate shares as a hold due to projected returns.

Final Thoughts

SIR Royalty Income Fund offers a strong dividend yield of nearly 8.0%, supported by a diverse portfolio of established restaurant brands. With ongoing expansion and renovations, SIR Corp.’s efforts to grow and modernize its restaurant network could drive future revenue and dividend sustainability.

However, the Fund’s cash payout ratio has exceeded 100% in years past, which raises concerns about its ability to maintain high payouts if SIR Corp. faces financial or operational challenges. Economic factors like inflation and rising costs could also impact profitability.

The Fund appeals to income-focused investors, but its sustainability depends on SIR Corp.’s performance and broader economic conditions. Investors should monitor these factors before committing.

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