MTY Food Group: Buying Consistent Cash Flows At A Bargain Price

Atilla Zambito 272 Followers Follow Summary MTY Food Group offers resilient, recurring cash flows from a diversified, predominantly franchised portfolio of 90 brands, trading at a P/FCF below 7. I rate MTY as a Buy with a conservative fair value of $55 per share, reflecting 60% upside and a 4.2% dividend yield. Despite 11 quarters of negative same-store sales, MTY’s FCF remains robust; ongoing strategic review provides near-term optionality. Disciplined capital allocation, owner-oriented culture, and potential for multiple expansion underpin an attractive asymmetric risk/reward profile. ablokhin/iStock Editorial via Getty Images MTY operates quick service, fast casual and casual dining restaurants mostly in North America. The company owns around 90 different brands, such as Cold Stone Creamery, and Wetzel’s Pretzels. MTY generated CAD $1.19 billion in revenue in This article was written by Atilla Zambito 272 Followers Follow Value investing has been my main passion for more than a decade. I look for businesses the market has given up on but that still have strong fundamentals, often trading at single digit P/FCF, though I'll pay up to 15-20x for genuine quality. I hold for the long term and try to ignore short term noise.Current holdings include Cake Box Holdings, Watches of Switzerland, Celsius Holdings, Springer Nature, MTY Food Group, and CTS Eventim, plus smaller positions in Greggs, PayPal, Oatly, and [email protected] Analyst’s Disclosure: I/we have a beneficial long position in the shares of MTY:CA, MTYFF either through stock ownership, options, or other derivatives. 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.