Diversified Royalty Corp (DIV) AI Stock Analysis

• Market Cap: C$677.62M
• Dividend Yield: 7.14%
• Average Volume (3M): 316.19K
• Price to Earnings (P/E): 17.1
• Beta (1Y): 0.70
• Revenue Growth: 6.88%
• EPS Growth: -13.39%
• Country: CA
• Employees: 43
• Sector: Industrials
• Sector Strength: 72
• Industry: Conglomerates
• EPS (TTM): 0.06
• Shares Outstanding: 167,726,780
• 10 Day Avg. Volume: 329,600
• 30 Day Avg. Volume: 316,190
• PEG Ratio: 0.46
• Price to Book (P/B): 2.18
• Price to Sales (P/S): 8.88
• P/FCF Ratio: 13.84
• 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$4.50
• Price Target Upside: 16.88% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.22
• Revenue Forecast (FY): C$84.97M

• Rating: 60 Neutral
• Price Target: C$4.00 ▲(3.90% Upside)
• Action: Reiterated Date: 03/21/26
• Date: Action: Reiterated 03/21/26

The score is driven primarily by a generally solid operating and earnings profile, tempered by meaningful leverage and uneven free cash flow. Near-term technicals are weak and weigh on the result, while the high dividend yield provides partial support despite a mid-range P/E.

Positive Factors

Recurring royalty business model

DIV’s model earns formula-based royalties from underlying brands, producing recurring cash flows that scale with partner sales. Because it does not operate the businesses, DIV avoids operating capex and direct retail risk, making revenue durability tied to contractual streams rather than single-period sales.

Diversified royalty portfolio

Holding multiple royalty interests across consumer-facing brands reduces idiosyncratic operator risk and smooths revenue volatility over time. Portfolio diversification supports more stable aggregate royalties and lowers exposure to any single brand’s operational or regional setbacks.

Consistent positive operating cash flow

Sustained positive operating cash flow indicates the core royalty receipts are converting into cash, supporting debt service and distributions. Even with FCF swings, a multi-year trend of positive OCF provides a durable liquidity foundation for the royalty model and ongoing portfolio investments.

Negative Factors

Meaningful leverage

Elevated debt magnifies risk in a royalty business where cash receipts depend on third-party operators. High leverage limits financial flexibility, raises interest obligations, and reduces buffer for distribution coverage or new investments, increasing vulnerability if partner sales weaken or interest costs rise.

Volatile free cash flow

Large swings in free cash flow undermine predictability of cash available for debt repayment and dividends. This volatility forces reliance on financing, asset transactions, or payout adjustments, and reduces confidence in sustainably funding distributions during downturns or uneven royalty receipts.

Margin and earnings sensitivity

Earnings and margins vary materially with operator performance, accounting items, or expense timing, which makes profitability and dividend coverage less predictable. This sensitivity means adverse operating trends at one or more partners can quickly erode reported profits and cash flow.

Diversified Royalty Corp Business Overview & Revenue Model

Company Description

Diversified Royalty Corp., a multi-royalty corporation, engages in the acquisition of royalties from multi-location businesses and franchisors in North America. The company owns the Mr. Lube, AIR MILES, Sutton, Mr. Mikes, Nurse Next Door, and Oxford Learning Centres trademarks. The company was formerly known as BENEV Capital Inc. and changed its name to Diversified Royalty Corp. in September 2014. Diversified Royalty Corp. was incorporated in 1992 and is headquartered in Vancouver, Canada.

How the Company Makes Money

DIV makes money primarily by collecting royalties from its portfolio of royalty interests. Under its model, DIV invests capital (often alongside related parties or operating partners) and, in return, receives a defined royalty stream that is typically calculated as a percentage of the underlying business’s gross sales (often system-wide sales across franchised and corporate locations) or based on another sales-linked formula set out in the royalty agreement. These royalties create recurring revenue that rises or falls with the sales performance of the underlying brands. Key revenue streams: - Royalty income: The core source of revenue is periodic royalty payments from each royalty partner/brand pursuant to long-term royalty agreements. - Other investment/finance income (if applicable): The company may also earn interest or similar income related to financing structures associated with its royalty arrangements; specific amounts and terms are not provided here. Factors contributing to earnings: - Diversification across multiple royalty interests: By holding royalty streams from multiple businesses/brands, DIV seeks to reduce reliance on any single underlying operator’s performance. - Sales and unit growth at the underlying brands: Because royalties are generally tied to top-line sales, same-store sales trends, new store openings, franchise network expansion, pricing, and traffic at the underlying businesses directly influence DIV’s royalty revenue. - Contractual protections/structures: Royalty agreements may include reporting requirements, audit rights, reserve accounts, minimum royalty features, or security/priority arrangements; the presence and specifics of these protections vary by agreement and are not detailed here. Significant partnerships or operators: null

Diversified Royalty Corp Financial Statement Overview

Summary

Income statement strength (steady revenue growth and solid profitability post-2020) is offset by meaningful leverage on the balance sheet and volatile free cash flow despite positive operating cash flow, reducing confidence in stability of cash available for debt service and distributions.

Income Statement

Revenue has grown steadily from 2020 to 2025 (with strong growth in 2021–2023 and a slower pace in 2024–2025), while profitability is strong in most years. After a loss in 2020, the company returned to solid earnings from 2021 onward, culminating in higher net income in 2025 versus 2024. A watch-out is that profit margins appear to swing meaningfully year-to-year, which suggests earnings can be sensitive to portfolio performance, accounting items, or expense variability.

Balance Sheet

Leverage is meaningful: total debt remains high (roughly $256M in 2025) and has not materially delevered versus recent years, though it is down from 2023 levels. The debt-to-equity level improved from elevated 2023 levels (above 1x) to about 0.90x in 2024, indicating better balance between debt and equity, and equity has been relatively stable around ~$289M in 2024–2025. Returns on equity are decent (roughly 9%–13% in recent years), but the combination of sizable debt and limited equity growth leaves less room for error if cash generation weakens.

Cash Flow

Operating cash flow is consistently positive and improved in recent years (about $45–46M in 2024–2025). However, free cash flow has been volatile: materially negative in 2022–2023, strongly positive in 2024–2025, and the 2025 free-cash-flow growth rate is sharply negative (suggesting an unfavorable swing versus the prior year). Cash conversion looked strong in 2024 with free cash flow roughly matching net income, but the multi-year volatility reduces confidence in the stability of cash available for debt service and distributions.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	70.79M	64.99M	56.49M	45.18M	37.28M
Gross Profit	70.69M	64.89M	56.40M	42.91M	35.31M
EBITDA	64.86M	55.21M	58.77M	33.36M	41.16M
Net Income	36.67M	26.62M	31.72M	15.56M	23.52M
Balance Sheet
Total Assets	612.25M	578.98M	567.35M	458.45M	380.76M
Cash, Cash Equivalents and Short-Term Investments	4.61M	19.69M	4.03M	7.41M	8.94M
Total Debt	256.15M	260.47M	305.16M	199.78M	169.66M
Total Liabilities	323.66M	290.18M	329.95M	224.56M	189.24M
Stockholders Equity	288.59M	288.80M	237.40M	233.89M	191.53M
Cash Flow
Free Cash Flow	45.41M	46.48M	-46.41M	-50.93M	10.86M
Operating Cash Flow	45.42M	46.49M	30.82M	28.38M	27.82M
Investing Cash Flow	-49.51M	-8.00K	-77.22M	-79.31M	-16.96M
Financing Cash Flow	-10.53M	-30.77M	43.05M	49.37M	-11.14M

Diversified Royalty Corp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.85
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 3.85 is below the 20-day moving average (MA) of 4.10, below the 50-day MA of 3.99, and above the 200-day MA of 3.51, indicating a neutral trend. The MACD of -0.01 indicates Positive momentum. The RSI at 50.38 is Neutral, neither overbought nor oversold. The STOCH value of 37.85 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
CGY	66 Neutral	C$872.90M	30.99	6.36%	1.98%	3.69%	92.38%
WJX	66 Neutral	C$693.69M	10.32	10.91%	5.09%	3.71%	-12.70%
DXT	64 Neutral	C$739.59M	17.94	14.45%	3.02%	-0.73%	221.74%
KBL	64 Neutral	C$453.12M	23.08	8.31%	3.43%	26.29%	-6.47%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
DE	63 Neutral	C$160.61M	27.15	10.07%	7.88%	16.69%	111.74%
DIV	60 Neutral	C$677.62M	17.14	10.28%	7.14%	6.88%	-13.39%

Diversified Royalty Corp Corporate Events

Diversified Royalty Lifts 2025 Cash Flow as New AIR MILES Deal Bolsters Stability

Diversified Royalty Corp. reported 2025 revenue of $70.8 million and adjusted revenue of $76.1 million, reflecting high single-digit growth, while distributable cash rose 12.7% to $50.5 million and the annual payout ratio improved slightly to 88.1% despite higher dividends per share. Organic royalty growth moderated versus 2024 but remained positive at 4.1% for the year, supported by strong same-store sales growth at key partner Mr. Lube + Tires, solid fixed royalty contributions from partners such as Nurse Next Door, Stratus, BarBurrito and Cheba Hut, ongoing royalty relief to Sutton, and a newly amended AIR MILES agreement that replaces declining variable royalties with a long-term, escalating fixed royalty guaranteed by Bank of Montreal, enhancing cash flow visibility and stability for investors.

The most recent analyst rating on (TSE:DIV) stock is a Buy with a C$4.50 price target. To see the full list of analyst forecasts on Diversified Royalty Corp stock, see the TSE:DIV Stock Forecast page.

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

Diversified Royalty Corp., a North American multi-royalty company that owns trademarks across automotive services, real estate, restaurants, home care, education, commercial cleaning, quick-service Mexican food, sandwich franchises and loyalty programs, is focused on building diversified, top-line royalty streams from multi-location businesses and franchisors. Its model is designed to support predictable cash flow per share and a stable, dividend-focused return profile for investors.

The company’s board approved a March 2026 cash dividend of $0.02375 per common share, equivalent to $0.285 on an annualized basis, payable on March 31 to shareholders of record on March 13. DIV also set March 19, 2026 as the date to release its fourth-quarter and full-year 2025 results, signaling ongoing commitment to regular income distributions and financial transparency as it pursues growth in its diversified royalty portfolio.

The most recent analyst rating on (TSE:DIV) stock is a Buy with a C$4.50 price target. To see the full list of analyst forecasts on Diversified Royalty Corp stock, see the TSE:DIV Stock Forecast page.

Diversified Royalty Lifts Debenture Offering to $69 Million After Over-Allotment Close

Diversified Royalty Corp. has closed the over-allotment option tied to its recent bought deal public offering of 5.75% convertible unsecured subordinated debentures, issuing an additional $9 million and lifting total gross proceeds from the financing to $69 million. The debentures, which trade on the Toronto Stock Exchange under the symbol DIV.DB.B, were sold through a syndicate led by CIBC Capital Markets and Desjardins Securities.

The company plans to use the net proceeds to repay amounts outstanding under its acquisition facility, fund expected additions to royalty pools of certain partners and support working capital and general corporate purposes. By reducing debt on its acquisition facility and freeing up borrowing capacity, DIV strengthens its balance sheet and enhances its ability to pursue future royalty acquisitions, underpinning its strategy of growing predictable royalty streams and sustaining stable monthly dividends over time.

The most recent analyst rating on (TSE:DIV) stock is a Buy with a C$4.50 price target. To see the full list of analyst forecasts on Diversified Royalty Corp stock, see the TSE:DIV Stock Forecast page.

Diversified Royalty boosts debenture deal to $69 million to fund growth

Diversified Royalty Corp., a Canadian multi-royalty company focused on acquiring predictable top-line royalties from a diverse mix of franchise and multi-location businesses in North America, holds trademarks across sectors such as quick lube services, real estate brokerage, restaurants, home care, education, commercial cleaning, and loyalty programs. Its strategy centers on accretive royalty acquisitions and growing royalty streams to support steady and potentially increasing monthly dividends for shareholders.

The company announced that underwriters have fully exercised an over-allotment option tied to its recently completed $60 million bought deal offering of 5.75% convertible unsecured subordinated debentures, adding a further $9 million and bringing total gross proceeds to about $69 million. Net proceeds will be used to repay amounts under its acquisition facility, fund additions to royalty pools for existing royalty partners, and for general corporate purposes, effectively refreshing borrowing capacity for future acquisitions and reinforcing DIV’s ability to expand its royalty portfolio and cash flow base.

The most recent analyst rating on (TSE:DIV) stock is a Buy with a C$4.50 price target. To see the full list of analyst forecasts on Diversified Royalty Corp stock, see the TSE:DIV Stock Forecast page.

Diversified Royalty Closes $60 Million Convertible Debenture Offering

Diversified Royalty Corp. has completed a $60 million bought deal public offering of 5.75% convertible unsecured subordinated debentures, priced at $1,000 each and now trading on the TSX under the symbol DIV.DB.B. The debentures, which mature on March 31, 2031 and are convertible into common shares at $5.35 per share, include an over-allotment option of up to $9 million for the underwriters.

The company plans to use the net proceeds to repay amounts outstanding under its acquisition facility, fund expected additions to the royalty pools of certain royalty partners, and for general corporate and working capital purposes. By paying down its acquisition facility, DIV will increase its capacity to fund future royalty acquisitions, reinforcing its growth strategy and potentially enhancing returns for shareholders and other stakeholders.

The most recent analyst rating on (TSE:DIV) stock is a Buy with a C$4.50 price target. To see the full list of analyst forecasts on Diversified Royalty Corp stock, see the TSE:DIV Stock Forecast page.

Diversified Royalty Corp. Declares February 2026 Monthly Dividend

Diversified Royalty Corp. has declared a cash dividend of $0.02375 per common share for February 2026, equivalent to $0.285 on an annualized basis, payable on February 27, 2026 to shareholders of record as of February 13, 2026. The announcement underscores the company’s continued emphasis on delivering a stable monthly income stream to investors, aligning with its stated strategy of using its diversified royalty portfolio to support predictable cash flow and ongoing dividend payments as cash generation permits.

The most recent analyst rating on (TSE:DIV) stock is a Buy with a C$4.50 price target. To see the full list of analyst forecasts on Diversified Royalty Corp stock, see the TSE:DIV Stock Forecast page.

Diversified Royalty Upsizes Convertible Debenture Offering to $60 Million

Diversified Royalty Corp. has upsized its previously announced public offering of 5.75% convertible unsecured subordinated debentures to $60 million, citing strong investor demand, and has granted underwriters an over-allotment option for up to an additional $9 million. The debentures, maturing March 31, 2031, are convertible into common shares at $5.35 and feature defined redemption terms, with net proceeds earmarked to repay amounts under the company’s acquisition facility, support additions to royalty pools of certain partners, and fund working capital, effectively expanding DIV’s financial capacity for future royalty acquisitions and portfolio growth, subject to regulatory approvals.

The most recent analyst rating on (TSE:DIV) stock is a Buy with a C$4.50 price target. To see the full list of analyst forecasts on Diversified Royalty Corp stock, see the TSE:DIV Stock Forecast page.

Diversified Royalty Corp. to Raise $50 Million via Convertible Debenture Offering

Diversified Royalty Corp. has launched a $50 million bought deal public offering of 5.75% convertible unsecured subordinated debentures, with an additional $7.5 million over-allotment option, maturing March 31, 2031 and convertible into common shares at $5.35, subject to specified redemption terms tied to the company’s share price performance. The company plans to use the net proceeds to repay amounts outstanding under its acquisition facility, fund expected additions to royalty pools of certain royalty partners, and for general corporate purposes, effectively replenishing its borrowing capacity to support future acquisitions and ongoing portfolio growth, with the deal expected to close on or about February 9, 2026, pending regulatory and TSX approval.

The most recent analyst rating on (TSE:DIV) stock is a Buy with a C$4.50 price target. To see the full list of analyst forecasts on Diversified Royalty Corp stock, see the TSE:DIV Stock Forecast page.

Diversified Royalty Locks In BMO-Backed AIR MILES Royalties Under Amended License Deal

Diversified Royalty Corp. has amended its AIR MILES license agreements through subsidiary AM Royalties Limited Partnership, locking in a 10-year fixed annual royalty of $3.925 million, paid quarterly and escalating 2.42% annually from 2027, with payments now guaranteed by Bank of Montreal. The revised terms, negotiated as BMO shifts from the AIR MILES Reward Program to a new loyalty offering, materially improve economics for DIV by boosting annual AIR MILES royalty income by more than 20%, reversing years of erosion, and potentially generating about $43.8 million over the next decade; from 2032, DIV gains flexibility to monetize the AIR MILES trademarks elsewhere, while Air Miles may buy out the remaining license term and acquire related program intellectual property, reshaping the risk-return profile of what had been the company’s weakest-performing royalty asset.

The most recent analyst rating on (TSE:DIV) stock is a Buy with a C$4.50 price target. To see the full list of analyst forecasts on Diversified Royalty Corp stock, see the TSE:DIV Stock Forecast page.