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Diversified Royalty

Market Cap

CA$297.1m

Last Updated

2021/04/16 22:15 UTC

Data Sources

Company Financials +

Executive Summary

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


Snowflake Analysis

Reasonable growth potential and slightly overvalued.

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 is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: DIV's weekly volatility (3%) has been stable over the past year.


Market Performance


7 Day Return

-2.3%

DIV

3.3%

CA Specialty Retail

0.6%

CA Market


1 Year Return

51.5%

DIV

120.3%

CA Specialty Retail

38.5%

CA Market

Return vs Industry: DIV underperformed the Canadian Specialty Retail industry which returned 122.3% over the past year.

Return vs Market: DIV exceeded the Canadian Market which returned 42.1% over the past year.


Shareholder returns

DIVIndustryMarket
7 Day-2.3%3.3%0.6%
30 Day-1.6%7.1%1.3%
90 Day3.7%19.0%8.7%
1 Year66.8%51.5%124.7%120.3%43.3%38.5%
3 Year-3.5%-24.7%39.7%31.2%32.0%19.2%
5 Year60.2%5.9%53.6%35.0%57.5%33.4%

Long-Term 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?

18.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DIV (CA$2.5) is trading below our estimate of fair value (CA$3.07)

Significantly Below Fair Value: DIV is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: DIV is unprofitable, so we can't compare its PE Ratio to the CA 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 (1.6x) compared to the CA Specialty Retail industry average (2.5x).


Future Growth

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

99.9%

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 (1.5%).

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 (9.2% per year) is forecast to grow faster than the Canadian market (6.7% per year).

High Growth Revenue: DIV's revenue (9.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DIV's Return on Equity is forecast to be low in 3 years time (10.9%).


Past Performance

How has Diversified Royalty performed over the past 5 years?

-21.8%

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, and losses have increased over the past 5 years at a rate of 21.8% 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 (-11.9%).


Return on Equity

High ROE: DIV has a negative Return on Equity (-4.68%), as it is currently unprofitable.


Financial Health

How is Diversified Royalty's financial position?


Financial Position Analysis

Short Term Liabilities: DIV's short term assets (CA$13.9M) exceed its short term liabilities (CA$3.7M).

Long Term Liabilities: DIV's short term assets (CA$13.9M) do not cover its long term liabilities (CA$165.0M).


Debt to Equity History and Analysis

Debt Level: DIV's debt to equity ratio (83.6%) is considered high.

Reducing Debt: DIV's debt to equity ratio has increased from 23.1% to 83.6% over the past 5 years.

Debt Coverage: DIV's debt is not well covered by operating cash flow (13.9%).

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


Balance Sheet


Dividend

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

8.00%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: DIV's dividend (8%) is higher than the bottom 25% of dividend payers in the Canadian market (1.48%).

High Dividend: DIV's dividend (8%) is in the top 25% of dividend payers in the Canadian market (4.74%)


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: DIV's dividends in 3 years are not forecast to be well covered by earnings (123.8% payout ratio).


Next Steps

Management

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

2.8yrs

Average board tenure


CEO

Sean Morrison (50 yo)

7.67yrs

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 ($USD948.36K) is above average for companies of similar size in the Canadian market ($USD503.74K).

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


Board Members

Experienced Board: DIV's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


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$297.125m
  • Shares outstanding: 121.42m
  • Website: https://www.diversifiedroyaltycorp.com

Number of Employees


Location

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

Listings


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....


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/04/16 22:15
End of Day Share Price2021/04/16 00:00
Earnings2020/12/31
Annual Earnings2020/12/31


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.