TSX:DIV

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Diversified Royalty

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 Analysis

Fair value with moderate growth potential.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: DIV's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

6.1%

DIV

2.0%

CA Specialty Retail

2.0%

CA Market


1 Year Return

-44.4%

DIV

-32.8%

CA Specialty Retail

-11.4%

CA Market

Return vs Industry: DIV underperformed the Canadian Specialty Retail industry which returned -34% over the past year.

Return vs Market: DIV underperformed the Canadian Market which returned -11% over the past year.


Shareholder returns

DIVIndustryMarket
7 Day6.1%2.0%2.0%
30 Day-3.8%5.9%4.1%
90 Day-41.5%-23.0%-8.8%
1 Year-39.6%-44.4%-30.7%-32.8%-8.3%-11.4%
3 Year-18.1%-34.9%-40.4%-45.0%-0.2%-9.5%
5 Year-8.7%-39.2%-39.2%-47.0%15.9%-0.7%

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 compared to its fair value and its price relative to the market?

46.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DIV (CA$1.75) is trading below our estimate of fair value (CA$3.27)

Significantly Below Fair Value: DIV is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: DIV is unprofitable, so we can't compare its PE Ratio to the Specialty Retail industry average.

PE vs Market: DIV is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate DIV's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: DIV is good value based on its PB Ratio (1x) compared to the CA Specialty Retail industry average (1x).


Next Steps

Future Growth

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

101.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DIV is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: DIV is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: DIV's is expected to become profitable in the next 3 years.

Revenue vs Market: DIV's revenue (4.7% per year) is forecast to grow slower than the Canadian market (5.7% per year).

High Growth Revenue: DIV's revenue (4.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if DIV's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Diversified Royalty performed over the past 5 years?

2.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DIV is currently unprofitable.

Growing Profit Margin: DIV is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: DIV is unprofitable, but has reduced losses over the past 5 years at a rate of 2.7% per year.

Accelerating Growth: Unable to compare DIV's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: DIV is unprofitable, making it difficult to compare its past year earnings growth to the Specialty Retail industry (-7.7%).


Return on Equity

High ROE: DIV has a negative Return on Equity (-0.083%), as it is currently unprofitable.


Next Steps

Financial Health

How is Diversified Royalty's financial position?


Financial Position Analysis

Short Term Liabilities: DIV's short term assets (CA$16.0M) exceed its short term liabilities (CA$2.8M).

Long Term Liabilities: DIV's short term assets (CA$16.0M) do not cover its long term liabilities (CA$165.7M).


Debt to Equity History and Analysis

Debt Level: DIV's debt to equity ratio (72.9%) is considered high.

Reducing Debt: DIV's debt to equity ratio has increased from 11.1% to 72.9% over the past 5 years.

Debt Coverage: DIV's debt is not well covered by operating cash flow (14.4%).

Interest Coverage: DIV is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet


Next Steps

Dividend

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

11.43%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: DIV's dividend (11.43%) is higher than the bottom 25% of dividend payers in the Canadian market (2.04%).

High Dividend: DIV's dividend (11.43%) is in the top 25% of dividend payers in the Canadian market (6.37%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, DIV has been paying a dividend for less than 10 years.

Growing Dividend: DIV's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: DIV is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.3yrs

Average board tenure


CEO

Sean Morrison (49yo)

6.83yrs

Tenure

CA$1,185,497

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

Compensation vs Market: Sean's total compensation ($USD858.71K) is about average for companies of similar size in the Canadian market ($USD730.54K).

Compensation vs Earnings: Sean's compensation has increased whilst the company is unprofitable.


Board Members

NamePositionTenureCompensationOwnership
Johnny Ciampi
Director5.58yrsCA$65.73k0.60% CA$1.3m
Garry Herdler
Independent Director2yrsCA$69.82kno data
Lawrence Haber
Chairman of the Board9yrsCA$87.88k0.17% CA$363.8k
Paula Rogers
Independent Director5.25yrsCA$74.88k0.097% CA$204.3k
Lorraine McLachlan
Independent Director2yrsCA$62.48k0.0054% CA$11.4k

5.3yrs

Average Tenure

50yo

Average Age

Experienced Board: DIV's board of directors are considered experienced (5.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: DIV insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 11.6%.


Top Shareholders

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: Automotive Retail
  • Sector: Retail
  • Market Cap: CA$211.445m
  • Shares outstanding: 120.83m
  • 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 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 founded in 1992 and is headquartered in Vancouver, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/01 02:35
End of Day Share Price2020/05/29 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


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.