Diversified Royalty Corp (DIV) AI Stock Analysis

• Market Cap: C$459.74M
• Dividend Yield: 8.42%
• Average Volume (3M): 285.04K
• Price to Earnings (P/E): 18.2
• Beta (1Y): 0.70
• Revenue Growth: 10.66%
• EPS Growth: -27.12%
• Country: CA
• Employees: 43
• Sector: Industrials
• Sector Strength: 91
• Industry: Conglomerates
• EPS (TTM): 0.05
• Shares Outstanding: 154,794,740
• 10 Day Avg. Volume: 234,055
• 30 Day Avg. Volume: 285,044
• PEG Ratio: -1.21
• Price to Book (P/B): 1.68
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 9.63
• 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: 24.24% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

Diversified Royalty Corp demonstrates strong financial health with solid revenue growth and profitability. The technical indicators are neutral, offering no clear buy or sell signal. Attractive valuation metrics, especially the high dividend yield, make this stock appealing for income investors, despite the high debt-to-equity ratio which poses a risk that should be monitored. Overall, the stock presents a solid opportunity for those seeking income, with a positive outlook based on recent strategic corporate actions.

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 displays strong financial performance with consistent revenue growth, high gross margins, and effective cash flow management. However, the 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
	EBIT
50.19M	50.82M	32.78M	34.83M	680.00K
	EBITDA
55.21M	58.77M	40.44M	41.99M	-4.76M
	Net Income Common Stockholders
26.62M	31.72M	15.56M	23.52M	-8.88M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
19.69M	4.03M	7.41M	8.94M	9.22M
	Total Assets
578.98M	567.35M	458.45M	380.76M	358.40M
	Total Debt
260.47M	305.16M	199.78M	169.66M	156.20M
	Net Debt
240.77M	301.13M	192.37M	160.72M	146.98M
	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: 2.97
• 50DMA: Positive
• 100DMA: Positive
• 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 2.97 is above the 20-day moving average (MA) of 2.88, above the 50-day MA of 2.78, and above the 200-day MA of 2.78, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 67.79 is Neutral, neither overbought nor oversold. The STOCH value of 79.49 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	76 Outperform	C$459.74M	18.18	9.37%	8.42%	10.66%	-27.12%
WJX	73 Outperform	C$516.05M	12.57	8.09%	5.88%	-2.65%	-47.65%
DE	72 Outperform	C$144.99M	51.73	4.86%	7.38%	3.23%	-60.49%
KBL	71 Outperform	C$363.76M	20.31	9.69%	3.46%	16.35%	3.98%
Sector *	64 Neutral	$4.44B	11.99	5.16%	249.23%	4.01%	-11.87%
CHR	52 Neutral	C$538.52M	―	-0.09%	―	-17.58%	-703.93%

Diversified Royalty Corp Corporate Events

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.

Spark’s Take on TSE:DIV Stock

According to Spark, TipRanks’ AI Analyst, TSE:DIV is a Outperform.

Diversified Royalty Corp’s stock is supported by robust financial performance and attractive dividends, although caution is warranted due to the high debt-to-equity ratio. Technical indicators are neutral, with recent corporate events further enhancing the stock’s attractiveness. Overall, the stock presents a solid investment opportunity for income-focused investors, though leverage risks should be monitored.

To see Spark’s full report on TSE:DIV stock, click here.

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.

Spark’s Take on TSE:DIV Stock

According to Spark, TipRanks’ AI Analyst, TSE:DIV is a Outperform.

Diversified Royalty Corp’s strong financial health and attractive dividend yield are the primary strengths, while technical indicators are neutral. The high debt-to-equity ratio is a notable risk factor. Overall, the stock is appealing for its income potential, although investors should be mindful of leverage-related risks.

To see Spark’s full report on TSE:DIV stock, click here.

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.