TSX:DIV

Stock Analysis Report

Executive Summary

Diversified Royalty Corp., a multi-royalty corporation, engages in the acquisition of royalties from multi-location businesses and franchisors in North America.

Snowflake

Fundamentals

Reasonable growth potential with imperfect balance sheet.

Share Price & News

How has Diversified Royalty's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

2.1%

DIV

-1.6%

CA Hospitality

1.2%

CA Market


1 Year Return

-8.5%

DIV

-20.4%

CA Hospitality

-0.4%

CA Market

DIV outperformed the Hospitality industry which returned -20.4% over the past year.

DIV underperformed the Market in Canada which returned -0.4% over the past year.


Share holder returns

DIVIndustryMarket
7 Day2.1%-1.6%1.2%
30 Day4.7%5.9%3.3%
90 Day-4.3%-4.5%0.8%
1 Year-1.4%-8.5%-19.9%-20.4%3.1%-0.4%
3 Year54.9%23.2%20.6%17.4%18.0%7.4%
5 Year83.5%24.3%-3.3%-6.1%22.0%4.5%

Price Volatility Vs. Market

How volatile is Diversified Royalty's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Diversified Royalty undervalued based on future cash flows and its price relative to the stock market?

15%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Diversified Royalty's share price is below the future cash flow value, but not at a moderate discount (< 20%).

Diversified Royalty's share price is below the future cash flow value, but not at a substantial discount (< 40%).


Price Based on Earnings

Diversified Royalty is overvalued based on earnings compared to the CA Hospitality industry average.

Diversified Royalty is overvalued based on earnings compared to the Canada market.


Price Based on Expected Growth

Diversified Royalty is good value based on expected growth next year.


Price Based on Value of Assets

Diversified Royalty is overvalued based on assets compared to the CA Hospitality industry average.


Next Steps

Future Growth

How is Diversified Royalty expected to perform in the next 1 to 3 years based on estimates from 6 analysts?

43.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Diversified Royalty's revenue is expected to grow by 8% yearly, however this is not considered high growth (20% yearly).

Diversified Royalty's earnings are expected to grow significantly at over 20% yearly.

Diversified Royalty's revenue growth is expected to exceed the Canada market average.

Diversified Royalty's earnings growth is expected to exceed the Canada market average.

Diversified Royalty's earnings growth is expected to exceed the low risk savings rate of 1.9%.


Earnings per Share Growth Estimates


Future Return on Equity

Unable to establish if Diversified Royalty will efficiently use shareholders’ funds in the future without estimates of Return on Equity.


Next Steps

Past Performance

How has Diversified Royalty performed over the past 5 years?

17.1%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Diversified Royalty's year on year earnings growth rate has been positive over the past 5 years.

Diversified Royalty's 1-year earnings growth is negative, it can't be compared to the 5-year average.

Diversified Royalty's 1-year earnings growth is negative, it can't be compared to the CA Hospitality industry average.


Return on Equity

Diversified Royalty has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Diversified Royalty used its assets less efficiently than the CA Hospitality industry average last year based on Return on Assets.


Return on Capital Employed

Diversified Royalty's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Diversified Royalty's financial position?


Financial Position Analysis

Diversified Royalty is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Diversified Royalty's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

Diversified Royalty's level of debt (70.3%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (0.3% vs 70.3% today).

Debt is not well covered by operating cash flow (12.1%, less than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 3.7x coverage).


Balance Sheet

Low level of unsold assets.

Debt is not covered by short term assets, assets are 0.4x debt.


Next Steps

Dividend

What is Diversified Royalty's current dividend yield, its reliability and sustainability?

7.78%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Diversified Royalty's pays a higher dividend yield than the bottom 25% of dividend payers in Canada (1.96%).

Diversified Royalty's dividend is above the markets top 25% of dividend payers in Canada (5.76%).

Whilst dividend payments have been stable, Diversified Royalty has been paying a dividend for less than 10 years.

Dividend payments have increased, but Diversified Royalty only paid a dividend in the past 5 years.


Current Payout to Shareholders

Dividends paid are not well covered by earnings (0.4x coverage).


Future Payout to Shareholders

Insufficient estimate data to determine if a dividend will be paid in 3 years and that it will be sustainable.


Next Steps

Management

What is the CEO of Diversified Royalty's salary, the management and board of directors tenure and is there insider trading?

6.1yrs

Average management tenure


CEO

Sean Morrison (49yo)

6.1yrs

Tenure

CA$1,165,103

Compensation

Mr. Sean Morrison, CA has been the Chief Executive Officer and President at Diversified Royalty Corp. since August 06, 2013. Mr. Morrison has been the Chief Executive Officer and President of BENEV Capital ...


CEO Compensation Analysis

Sean's remuneration is higher than average for companies of similar size in Canada.

Sean's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

6.1yrs

Average Tenure

The average tenure for the Diversified Royalty management team is over 5 years, this suggests they are a seasoned and experienced team.


Board Age and Tenure

2.9yrs

Average Tenure

50yo

Average Age

The average tenure for the Diversified Royalty board of directors is less than 3 years, this suggests a new board.


Insider Trading

More shares have been bought than sold by Diversified Royalty individual insiders in the past 3 months.


Recent Insider Transactions

BuyCA$107,53316 Aug 19
Johnny Ciampi
EntityIndividual
Role
Member of the Board of Directors
Director
Shares40,000
Max PriceCA$2.74
BuyCA$8,19014 Aug 19
Bryan Elwin
EntityIndividual
Shares3,000
Max PriceCA$2.73
BuyCA$12,68031 May 19
George Melville
EntityIndividual
Shares4,000
Max PriceCA$3.17
BuyCA$310,00021 Feb 19
Lance Tracey
EntityIndividual
Shares100,000
Max PriceCA$3.10

Ownership Breakdown


Management Team

  • Bryan Maskell

    Vice President of Sales & Marketing

    • Tenure: 14.7yrs
    • Compensation: CA$163.48k
  • Sean Morrison (49yo)

    President & CEO

    • Tenure: 6.1yrs
    • Compensation: CA$1.17m
  • Greg Gutmanis

    CFO, VP of Acquisitions & Corporate Secretary

    • Tenure: 4yrs
    • Compensation: CA$985.94k
  • Abigail Meana

    Corporate Controller

    • Tenure: 0yrs

Board Members

  • Johnny Ciampi (48yo)

    Director

    • Tenure: 4.8yrs
    • Compensation: CA$58.36k
  • Garry Herdler (50yo)

    Director

    • Tenure: 1.3yrs
    • Compensation: CA$33.15k
  • Lorie Haber (62yo)

    Chairman of the Board

    • Tenure: 8.3yrs
    • Compensation: CA$85.76k
  • Paula Rogers

    Director

    • Tenure: 4.5yrs
    • Compensation: CA$74.46k
  • Lorraine McLachlan

    Director

    • Tenure: 1.3yrs
    • Compensation: CA$30.45k
  • Anita Anand

    Director

    • Tenure: 1.3yrs
    • Compensation: CA$31.57k

Company Information

Diversified Royalty Corp.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Diversified Royalty Corp.
  • Ticker: DIV
  • Exchange: TSX
  • Founded: 1992
  • Industry: Restaurants
  • Sector: Consumer Services
  • Market Cap: CA$317.479m
  • Shares outstanding: 108.73m
  • Website: https://diversifiedroyaltycorp.com

Number of Employees


Location

  • Diversified Royalty Corp.
  • 510 Burrard Street
  • Suite 902
  • Vancouver
  • British Columbia
  • V6C 3A8
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DIVTSX (The Toronto Stock Exchange)YesCommon SharesCACADSep 1996
BEVF.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDSep 1996
BEWDB (Deutsche Boerse AG)YesCommon SharesDEEURSep 1996

Biography

Diversified Royalty Corp., a multi-royalty corporation, engages in the acquisition of royalties from multi-location businesses and franchisors in North America. It primarily holds the Canadian and United S ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/20 00:10
End of Day Share Price2019/09/19 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.