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Alaris Royalty
(TSX:AD.UN)
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Rating:71Outperform
Price Target:
C$28.00
▲(14.94% Upside)
Action:Reiterated
Date:08/17/26
The score is led down by weak recent cash generation (negative TTM operating and free cash flow) despite strong reported profitability. Offsetting factors include attractive valuation (low P/E and high dividend yield), constructive technical trend (above major moving averages with positive MACD), and a supportive earnings call featuring raised run-rate guidance and improving payout/distributable cash flow metrics, tempered by distribution variability and partner/covenant risks.
Positive Factors
Portfolio Expansion
Continued deployment and a larger partner base can expand recurring royalty streams and diversify exposure across operating businesses. This supports longer-term revenue capacity if Alaris maintains disciplined underwriting and partner monitoring.
Negative Factors
Weak Cash Conversion
Negative operating and free cash flow despite reported profitability indicates that accounting earnings are not consistently converting into cash. If sustained, this could constrain reinvestment and distributions and increase reliance on repayments, asset proceeds, or external funding.
Read all positive and negative factors
Positive Factors
Negative Factors
Portfolio Expansion
Continued deployment and a larger partner base can expand recurring royalty streams and diversify exposure across operating businesses. This supports longer-term revenue capacity if Alaris maintains disciplined underwriting and partner monitoring.
Read all positive factors
Alaris Royalty (AD.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$1.19B
Dividend Yield6.51%
Average Volume (3M)119.31K
Price to Earnings (P/E)6.3
Beta (1Y)1.01
Revenue Growth-5.14%
EPS Growth25.79%
CountryCA
Employees22
SectorFinancial
Sector Strength70
IndustryAsset Management - Income
Share Statistics
EPS (TTM)3.70
Shares Outstanding50,776,245
10 Day Avg. Volume226,015
30 Day Avg. Volume119,310
Financial Highlights & Ratios
PEG Ratio-0.17
Price to Book (P/B)0.83
Price to Sales (P/S)4.20
P/FCF Ratio-7.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$28.96Price Target Upside18.88% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)2.69
Revenue Forecast (FY)C$222.86M
Alaris Royalty Business Overview & Revenue Model
Company Description
Alaris Equity Partners Income Trust is a Canadian alternative capital provider that supplies non-control preferred and common equity financing to private middle-market businesses (Partners) in exchange for priority distributions, dividends, or int...
How the Company Makes Money
Alaris makes money primarily by investing capital into private operating companies (its “partners”) in exchange for recurring cash distributions defined by contract. These distributions are commonly structured as royalties or royalty-like payments...
Alaris Royalty Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial momentum: revenue, operating income, preferred distributions, distributable cash flow, net book value per unit, and fair value gains all showed meaningful improvement. Management has actively deployed capital ($126M YTD) and expanded the portfolio to a record 25 partners while maintaining liquidity ($127M undrawn) and a payout ratio below targets. Offsetting these positives are timing variability in common distributions, some partner‑specific softness (regional/construction exposure, one weather‑impacted partner), intermittent payment and covenant pressure at GWM, FX‑driven volatility in reported earnings, and the potential need for additional funding if deployment accelerates further. On balance, the highlights substantially outweigh the lowlights.Positive Updates
Partner Revenue and Guidance Beat
Total partner revenue of $50.6 million in Q2, 5.6% ahead of guidance (including $49.9M of partner distributions and $0.7M of third‑party fees).
Negative Updates
Common Distributions Timing and Variability
Common distributions were below the prior year in Q2 (noted as largely a timing matter since Q2 is typically the lightest common quarter). Although $14.8M of common distributions were received post‑quarter, common payouts remain discretionary and timing can cause quarter‑to‑quarter volatility.
Read all updates
Q2-2026 Updates
Positive
Negative
Partner Revenue and Guidance Beat
Total partner revenue of $50.6 million in Q2, 5.6% ahead of guidance (including $49.9M of partner distributions and $0.7M of third‑party fees).
Read all positive updates
Company Guidance
The company guided to Q3 partner revenue of approximately $69 million and raised its next‑12‑month estimate run‑rate revenue to about $208 million (up from $200M at year‑end and $203M at Q1, roughly 14% above the $183M estimate a year ago), while noting pro forma payout of ~59% and a forward run‑rate payout range of 60%–65% (comfortably below the long‑term 65%–70% target); it finished the quarter with $127 million of undrawn credit capacity, has deployed $126 million of capital YTD (including $75M into Kubik and a subsequent USD35M into Tesco) and expanded to a record 25 partners, reported Q2 partner revenue of $50.6M (5.6% ahead of guidance), Q2 net distributable cash flow +42% YoY and +21% YTD, preferred distributions annualized yield 12.8% (from 12.2% a year ago), net book value per unit $25.83 (up $0.52 in the quarter, $1.04 YTD), a weighted average ECR ~1.5x with 84% of contractual preferred distributions from partners >1.2x coverage and 16 of 25 partners with senior debt ≤1x EBITDA; management also noted common dividends included in the run‑rate of roughly $25M for the remainder of 2026 (dropping to ~$16–17M on a conservative TTM forward into 2027).Alaris Royalty Financial Statement Overview
Summary
Income Statement
77
Positive
Balance Sheet
72
Positive
Cash Flow
34
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 228.50M | 222.63M | 154.99M | 241.25M | 227.99M | 157.59M |
| Gross Profit | 206.36M | 193.43M | 154.99M | 179.08M | 227.99M | 157.59M |
| EBITDA | 249.52M | 186.23M | 240.59M | 202.66M | 183.36M | 191.24M |
| Net Income | 168.07M | 90.81M | 234.41M | 138.45M | 130.68M | 144.24M |
Balance Sheet | ||||||
| Total Assets | 1.48B | 1.42B | 1.20B | 1.47B | 1.37B | 1.28B |
| Cash, Cash Equivalents and Short-Term Investments | 3.43M | 6.38M | 4.20M | 15.18M | 60.19M | 18.45M |
| Total Debt | 273.19M | 263.74M | 64.64M | 403.39M | 372.49M | 416.66M |
| Total Liabilities | 302.87M | 296.83M | 97.72M | 514.07M | 471.85M | 486.35M |
| Stockholders Equity | 1.18B | 1.12B | 1.10B | 960.82M | 898.25M | 788.86M |
Cash Flow | ||||||
| Free Cash Flow | -43.97M | -124.71M | 59.37M | 82.96M | 152.42M | -15.44M |
| Operating Cash Flow | -43.97M | -124.71M | 59.37M | 82.96M | 152.42M | 104.16M |
| Investing Cash Flow | 0.00 | 0.00 | 0.00 | -98.32M | 14.85M | -228.99M |
| Financing Cash Flow | 43.19M | 126.94M | -62.12M | -29.91M | -125.16M | 128.47M |
Alaris Royalty Technical Analysis
Neutral
24.36
Price Trends
23.96
Negative
23.57
Negative
22.08
Positive
Market Momentum
-0.19
Negative
46.00
Neutral
21.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AD.UN, the sentiment is Neutral. The current price of 24.36 is above the 20-day moving average (MA) of 23.19, above the 50-day MA of 23.96, and above the 200-day MA of 22.08, indicating a neutral trend. The MACD of -0.19 indicates Negative momentum. The RSI at 46.00 is Neutral, neither overbought nor oversold. The STOCH value of 21.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:AD.UN.
Alaris Royalty Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | C$1.09B | 7.80 | 11.06% | 1.21% | -93.61% | 24.49% | |
74 Outperform | C$692.54M | 30.99 | 16.54% | 2.02% | 3.93% | ― | |
73 Outperform | C$1.02B | 7.17 | 11.46% | 3.38% | 12.19% | 26.48% | |
71 Outperform | C$1.19B | 6.27 | 14.64% | 6.51% | -5.14% | 25.79% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
55 Neutral | C$851.47M | 10.00 | 13.08% | 8.06% | 12.78% | 14.21% |
* Financial Sector Average
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Alaris Royalty Corporate Events
Business Operations and StrategyFinancial Disclosures
Alaris Equity Partners Posts Record Book Value and Cash Flow Growth in Q2 2026
Positive
Aug 6, 2026
Alaris Equity Partners Income Trust reported record net book value per unit of $25.83 in the second quarter of 2026, reflecting strong earnings and unrealized foreign exchange gains. The firm’s recurring run rate revenue rose to an estimated...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.