Diversified Royalty Corp (DIV) AI Stock Analysis

• Market Cap: C$502.60M
• Dividend Yield: 7.71%
• Average Volume (3M): 406.46K
• Price to Earnings (P/E): 19.8
• Beta (1Y): 0.69
• Revenue Growth: 10.66%
• EPS Growth: -27.12%
• Country: CA
• Employees: 43
• Sector: Industrials
• Sector Strength: 86
• Industry: Conglomerates
• EPS (TTM): 0.05
• Shares Outstanding: 155,122,630
• 10 Day Avg. Volume: 634,603
• 30 Day Avg. Volume: 406,456
• PEG Ratio: -0.65
• Price to Book (P/B): 1.60
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -7.35
• 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$3.93
• Price Target Upside: 21.30% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 74 Outperform
• Price Target: C$3.50 ▲(8.02%Upside)

The overall stock score is driven by strong financial performance and positive corporate events, offset by technical indicators suggesting potential short-term volatility. The company's strategic moves and high dividend yield further support the stock's attractiveness, particularly for income-focused investors.

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 royalties from a diverse range of well-managed businesses and franchisors in North America. The company seeks to provide its shareholders with steady and growing cash flow through the acquisition of royalties from established brands across various sectors, including quick-service restaurants, automotive services, and professional services.

How the Company Makes Money

Diversified Royalty Corp makes money by acquiring top-line royalties from a portfolio of multi-location businesses and franchisors. The company purchases these royalties and then benefits from a percentage of the sales generated by the underlying businesses. Key revenue streams include royalties from brands like Mr. Lube, Sutton Group Realty, and Nurse Next Door, among others. DIV's earnings are significantly influenced by the performance of these brands, as the royalties are directly tied to their sales levels. Additionally, DIV actively seeks new acquisition opportunities to diversify and enhance its royalty portfolio, contributing to its revenue growth.

Diversified Royalty Corp Financial Statement Overview

Summary

Diversified Royalty Corp demonstrates strong financial performance with consistent revenue growth and profitability. High gross and EBIT margins indicate efficient operations, while strong cash flow management supports financial stability. However, a high debt-to-equity ratio poses a potential risk.

Income Statement

Diversified Royalty Corp has shown strong revenue growth with a 15% increase from 2023 to 2024. The company maintains high gross and EBIT margins at 100% and 77% respectively, indicating efficient cost management. However, the net profit margin decreased slightly to 41%, suggesting increased operational costs or taxes.

Balance Sheet

The company's debt-to-equity ratio is relatively high at 0.90, which may indicate higher financial leverage. The return on equity remains strong at 9.22%, and the equity ratio improved to 49.87%, reflecting good asset management and financial stability.

Cash Flow

The cash flow analysis shows a positive turnaround with a significant free cash flow of $46.5 million in 2024, signaling improved cash management. The operating cash flow to net income ratio of 1.75 suggests robust cash generation from operations.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	64.99M	56.49M	45.18M	37.28M	30.50M
Gross Profit	64.89M	56.40M	42.91M	35.31M	29.00M
EBITDA	55.21M	58.77M	40.44M	41.99M	-4.76M
Net Income	26.62M	31.72M	15.56M	23.52M	-8.88M
Balance Sheet
Total Assets	578.98M	567.35M	458.45M	380.76M	358.40M
Cash, Cash Equivalents and Short-Term Investments	19.69M	4.03M	7.41M	8.94M	9.22M
Total Debt	260.47M	305.16M	199.78M	169.66M	156.20M
Total Liabilities	290.18M	329.95M	224.56M	189.24M	168.72M
Stockholders Equity	288.80M	237.40M	233.89M	191.53M	189.67M
Cash Flow
Free Cash Flow	46.48M	-46.41M	-50.93M	10.86M	-22.22M
Operating Cash Flow	46.49M	30.82M	28.38M	27.82M	22.10M
Investing Cash Flow	-8.00K	-77.22M	-79.31M	-16.96M	-44.32M
Financing Cash Flow	-30.77M	43.05M	49.37M	-11.14M	28.47M

Diversified Royalty Corp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.24
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 3.24 is above the 20-day moving average (MA) of 3.08, above the 50-day MA of 2.97, and above the 200-day MA of 2.82, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 70.66 is Negative, neither overbought nor oversold. The STOCH value of 82.05 is Negative, 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	74 Outperform	C$502.60M	19.83	9.37%	7.71%	10.66%	-27.12%
KBL	74 Outperform	C$451.45M	20.50	9.69%	3.45%	16.35%	3.98%
WJX	73 Outperform	C$502.18M	12.25	8.09%	6.03%	-2.65%	-47.65%
DE	72 Outperform	C$150.03M	53.43	4.86%	7.16%	3.23%	-60.49%
Sector *	68 Neutral	€2.80B	17.63	9.89%	2.89%	-0.64%	-28.31%
CHR	59 Neutral	C$584.20M	―	-0.09%	―	-17.58%	-703.93%

Diversified Royalty Corp Corporate Events

Diversified Royalty Corp. Increases Annual Dividend

Diversified Royalty Corp. announced an increase in its annual dividend from 25.0 cents to 27.5 cents per share, effective July 1, 2025, with a cash dividend of $0.02292 per common share for July 2025. This move reflects the company’s strategy to provide stable and predictable dividends, potentially enhancing shareholder value and reinforcing its commitment to growth through accretive royalty purchases.

The most recent analyst rating on (TSE:DIV) stock is a Hold with a C$3.00 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. Confirms Director Elections at AGM

Diversified Royalty Corp. announced the successful election of all nominated directors at its annual general meeting, reflecting strong shareholder support. This outcome reinforces the company’s strategic direction and commitment to enhancing shareholder value through stable dividends and accretive royalty acquisitions.

The most recent analyst rating on (TSE:DIV) stock is a Hold with a C$3.00 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. Expands U.S. Portfolio with Cheba Hut Acquisition

Diversified Royalty Corp. has acquired the trademarks and intellectual property of Cheba Hut Franchising, Inc., marking its ninth royalty stream and second U.S.-based asset. This acquisition is expected to enhance DIV’s revenue with an initial annual royalty of US$4 million, contributing approximately 7% to its pro-forma adjusted revenue. The acquisition also prompted a 10% increase in DIV’s annual dividend, reflecting the company’s strong financial position and growth strategy. The transaction is anticipated to expand DIV’s tax pools significantly, offering potential tax benefits and reinforcing its market positioning.

The most recent analyst rating on (TSE:DIV) stock is a Hold with a C$3.00 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 June 2025 Dividend, Reinforces Commitment to Shareholder Value

Diversified Royalty Corp. has announced a cash dividend of $0.02083 per common share for June 2025, reflecting an annualized dividend of $0.25 per share. This decision underscores DIV’s commitment to providing stable and predictable dividends to its shareholders, aligning with its strategy to increase cash flow per share through strategic royalty acquisitions. The announcement is indicative of DIV’s robust financial health and its ongoing efforts to enhance shareholder value through consistent dividend payouts.

The most recent analyst rating on (TSE:DIV) stock is a Hold with a C$3.00 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. Reports Strong Q1 2025 Results and Leadership Update

Diversified Royalty Corp. reported a 3.7% increase in revenue for Q1 2025, reaching $15.6 million, with adjusted revenue rising to $17.0 million. The company experienced a 16.3% increase in distributable cash, highlighting strong performance from Mr. Lube + Tires and mixed results from other partners. Despite a decrease in royalty income from AIR MILES® and a 20% royalty deferral from Sutton, the overall financial health remains robust, with a payout ratio improvement to 93.8%. The leadership update indicates continued strategic focus on growth and stability, benefiting stakeholders through increased dividends and sustained royalty income.

The most recent analyst rating on (TSE:DIV) stock is a Hold with a C$3.00 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. Expands Mr. Lube + Tires Royalty Pool

Diversified Royalty Corp. has announced adjustments to the Mr. Lube + Tires Royalty Pool, which now includes royalties from six new flagship locations and removes one closed location, bringing the total to 149 locations. This adjustment reflects the company’s strategy to enhance its revenue streams and support Mr. Lube + Tires’ growth, as evidenced by the strong performance and expansion of the franchise. The financial implications include an initial payment of $4.0 million in shares to Mr. Lube + Tires, with further adjustments based on actual sales performance. This move is expected to strengthen DIV’s market position and provide continued value to its stakeholders.