A Cheap Income Fund to Beef Up Your TFSA’s Total Returns

A&W Revenue Royalties Income Fund (TSX:AW.UN) is a long-term winner that you’ll want to own for life.

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For income investors, the only thing better than a fat upfront distribution yield is a fat upfront distribution yield that continues to grow at a quick and sustainable rate.

Consider A&W Revenue Royalties Income Fund (TSX:AW.UN), an income fund catered toward income investors who desire the perfect blend of sustainable growth.

At the time of writing, the fund pays a bountiful 4.7% yield, but the most striking part of A&W’s security isn’t the upfront yield, it’s the magnitude of distribution growth enjoyed over the past decade, as well as the solid capital gains that have been as satisfying as A&W’s tasty new offerings.

When it comes to quality hamburgers, A&W is usually at the top of the list, especially for Canadians. The Burger family, a line-up of legendary classic burgers, is iconic and has found a spot with many generations over the course of decades.

While the good old classics and the frosted mug of A&W root beer would be enough to sustain impressive, fairly stable cash flows for many more years to come, the most compelling part of the A&W story is the fact that management isn’t stopping at its classics. It’s innovating, which is driving customers in its stores despite the fiercely competitive Canadian fast-food landscape that’s fighting for the lunch money of Canadians.

Consider the Beyond Meat burger, a vegetarian burger that uses plant-based proteins to replicate the taste and texture of meat. You’ve probably seen the televised ads touting the new Beyond Meat burger whereby burger-tasters have nothing but great things to say about the burger, and that they’re surprised it’s not real meat.

The Beyond Meat is a tasty burger!

I had the opportunity to try the new A&W Beyond Meat burger thanks to my girlfriend who’s a vegetarian, which pretty much makes me a vegetarian. But all memorable Pulp Fiction lines aside, A&W’s Beyond Meat burger, I believe, lives up to the hype and then some.

The burger tastes so much like real meat that it’s not only a “main attraction” at A&W for vegetarians, but it’s also now a go-to place for anyone interested in tasting the next big thing in strange, but satisfying food tech! The burger is that good, and although A&W doesn’t own the producer of the Beyond Meat patties, I think A&W’s management team deserves a round of applause for being one of the first popular Canadian burger chains to discover and incorporate the meat alternative into its menu.

Beyond Meat, a company that’s slated to have an IPO sometime soon, is quickly becoming a household name with other fast-food chains like Carl’s Jr. jumping onto the bandwagon. While A&W’s Beyond Meat burger looks like a mainstay item, I do believe the jolt provided by the burger will wear off, as A&W’s competitors incorporate similar great-tasting meat alternatives into their menus.

Foolish takeaway on A&W

A&W found a gem with Beyond Meat, and for that reason, they deserve a round of applause. Now that A&W has a robust line-up of beef, chicken (Chubby Chicken), and vegetarian options, system-wide sales look well-positioned to trend higher, so I think investors should expect even more generous distribution raises (and capital gains) over the short- to medium-term.

Stay hungry. Stay Foolish.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette has no position in any of the stocks mentioned.

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