Diversified Royalty Corp (DIV) AI Stock Analysis

• Market Cap: C$426.27M
• Dividend Yield: 9.58%
• Average Volume (3M): 343.52K
• Price to Earnings (P/E): 16.9
• Beta (1Y): 0.65
• Revenue Growth: 15.04%
• EPS Growth: -25.79%
• Country: CA
• Employees: 43
• Sector: Industrials
• Sector Strength: 61
• Industry: Conglomerates
• EPS (TTM): 0.16
• Shares Outstanding: 153,334,320
• 10 Day Avg. Volume: 338,591
• 30 Day Avg. Volume: 343,522
• PEG Ratio: 0.22
• Price to Book (P/B): N/A
• Price to Sales (P/S): 7.03
• Price to Cash Flow (P/CF): 8.90
• P/FCF Ratio: 7.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$3.69
• Price Target Upside: 32.73% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

Diversified Royalty Corp exhibits strong financial health with consistent revenue growth and robust margins. The valuation is attractive due to a high dividend yield and fair P/E ratio. Technical analysis suggests neutral sentiment, lacking strong momentum indicators.

Diversified Royalty Corp Business Overview & Revenue Model

Company Description

Diversified Royalty Corp (DIV) is a multi-royalty corporation based in Canada that focuses on acquiring top-line royalties from well-managed businesses and franchisors in North America. The company operates in diverse industries, including restaurants, automotive, and other consumer and business services, providing a stable and growing stream of royalty income through its portfolio of high-quality brands.

How the Company Makes Money

Diversified Royalty Corp generates revenue primarily through the acquisition of royalties from established businesses and franchisors. The company enters into royalty agreements with its partners, allowing it to receive a percentage of top-line sales in exchange for capital investment or other considerations. This model provides DIV with a steady and predictable income stream. Key revenue streams include royalties from various brands across different sectors, contributing to the diversification and stability of its earnings. Significant partnerships with strong, well-managed brands are crucial to the company's financial performance, ensuring a reliable source of income. By diversifying its portfolio across various industries, DIV minimizes risk and enhances its ability to generate consistent returns for shareholders.

Diversified Royalty Corp Financial Statement Overview

Summary

Diversified Royalty Corp demonstrates strong revenue growth and profitability with efficient operational performance. While the balance sheet reflects a balanced approach to financing, attention to leverage and asset financing is needed. Cash flow concerns arise from negative free cash flow, despite solid operating cash flow, indicating areas for potential improvement in financial management.

Income Statement

Diversified Royalty Corp shows strong revenue growth with a 13.91% increase in revenue over the past year. The company maintains high profitability with a consistent gross profit margin of approximately 98.82% for the TTM period. Net profit margin has slightly decreased from the previous year but remains robust at 49.26%. The EBIT and EBITDA margins are also impressive, indicating efficient operational performance.

Balance Sheet

The company has a moderate debt-to-equity ratio of 0.91, suggesting a balanced use of debt and equity financing. The return on equity is strong at 11.01%, reflecting effective utilization of shareholders' equity to generate profits. However, the equity ratio is 49.76%, indicating that just under half of the company's assets are financed by shareholders' equity, which could imply potential leverage risks.

Cash Flow

The cash flow statement indicates challenges with negative free cash flow of -$30.31 million, though operating cash flow remains positive at $42.17 million. The operating cash flow to net income ratio of 1.33 suggests good cash generation relative to net income. However, free cash flow growth has been negative, highlighting potential liquidity concerns if this trend continues.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
64.35M	56.49M	45.18M	37.28M	30.50M	30.46M
	Gross Profit
63.59M	56.40M	42.91M	35.31M	29.00M	28.67M
	EBIT
57.69M	50.82M	32.78M	34.83M	680.00K	26.35M
	EBITDA
56.61M	58.77M	40.44M	41.99M	-4.76M	27.29M
	Net Income Common Stockholders
31.70M	31.72M	15.56M	23.52M	-8.88M	14.04M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
78.34M	4.03M	7.41M	8.94M	9.22M	2.97M
	Total Assets
318.22M	567.35M	458.45M	380.76M	358.40M	345.27M
	Total Debt
116.80M	305.16M	199.78M	169.66M	156.20M	140.47M
	Net Debt
38.45M	301.13M	192.37M	160.72M	146.98M	137.50M
	Total Liabilities
125.50M	329.95M	224.56M	189.24M	168.72M	156.57M
	Stockholders Equity
192.72M	237.40M	233.89M	191.53M	189.67M	188.69M
Cash Flow		Free Cash Flow
-30.31M	-46.41M	-50.93M	10.86M	-22.22M	-17.30M
	Operating Cash Flow
42.17M	30.82M	28.38M	27.82M	22.10M	22.96M
	Investing Cash Flow
-72.47M	-77.22M	-79.31M	-16.96M	-44.32M	-92.25M
	Financing Cash Flow
37.57M	43.05M	49.37M	-11.14M	28.47M	-6.08M

Diversified Royalty Corp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.78
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DIV, the sentiment is Positive. The current price of 2.78 is above the 20-day moving average (MA) of 2.76, above the 50-day MA of 2.77, and above the 200-day MA of 2.78, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 55.09 is Neutral, neither overbought nor oversold. The STOCH value of 56.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:DIV.

Diversified Royalty Corp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DIV	81 Outperform	C$426.27M	16.94	10.12%	9.58%	15.04%	-25.79%
EIF	72 Outperform	C$2.41B	18.45	9.13%	5.68%	6.46%	-5.54%
AD.UN	71 Outperform	C$785.26M	3.36	22.73%	7.93%	57.02%	69.18%
Sector *	62 Neutral	$7.67B	13.25	3.04%	3.47%	3.63%	-13.99%
FSZ	59 Neutral	C$617.30M	24.46	8.22%	15.18%	5.64%	-57.76%
BIP	54 Neutral	$19.14B	2,718.52	0.96%	6.09%	17.33%	-92.62%
AQN	51 Neutral	$5.13B	―	1.65%	7.65%	-6.72%	-6766.85%

Diversified Royalty Corp Corporate Events

Diversified Royalty Corp. Declares April 2025 Cash Dividend

Diversified Royalty Corp. announced a cash dividend of $0.02083 per common share for April 2025, reflecting an annualized dividend of $0.25 per share. This decision underscores the company’s commitment to providing stable and predictable monthly dividends to its shareholders. The announcement is part of DIV’s broader strategy to enhance cash flow per share through accretive royalty acquisitions and the growth of existing royalties, aiming to increase dividends over time as cash flow permits.

Diversified Royalty Corp. Declares March 2025 Dividend and Sets Q4 2024 Earnings Release Date

Diversified Royalty Corp. announced a cash dividend of $0.02083 per common share for March 2025, equating to $0.25 annually, to be paid on March 31, 2025. The company will release its Q4 2024 earnings on March 24, 2025. This announcement underscores DIV’s commitment to providing stable and predictable dividends to shareholders, aligning with its strategy to grow cash flow per share through accretive royalty purchases and the expansion of its royalty streams.

Diversified Royalty Corp. Declares February 2025 Cash Dividend

Diversified Royalty Corp. announced a cash dividend of $0.02083 per common share for February 2025, reflecting a $0.25 annualized rate. This decision underscores DIV’s strategy for predictable and stable dividends, aiming to grow cash flow per share through strategic royalty acquisitions. The dividend is set to be distributed on February 28, 2025, to shareholders recorded by February 14, 2025, indicating a continued commitment to shareholder returns.