DIVERSIFIED ROYALTY CORP (DIV.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:DIV - CA2553311002 - Common Stock
3.89 CAD
+0.05 (+1.3%)
We assign a fundamental rating of 4 out of 10 to DIV. DIV was compared to 19 industry peers in the Specialty Retail industry. While DIV is still in line with the averages on profitability rating, there are concerns on its financial health. DIV has a decent growth rate and is not valued too expensively. DIV also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- DIV had positive earnings in the past year.
- DIV had a positive operating cash flow in the past year.
- Of the past 5 years DIV 4 years were profitable.
- DIV had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- With a Return On Assets value of 4.81%, DIV perfoms like the industry average, outperforming 57.89% of the companies in the same industry.
- With a decent Return On Equity value of 10.24%, DIV is doing good in the industry, outperforming 63.16% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 7.36%, DIV is in line with its industry, outperforming 57.89% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for DIV is below the industry average of 11.04%.
- The 3 year average ROIC (6.80%) for DIV is below the current ROIC(7.36%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.81% | ||
| ROE | 10.24% | ||
| ROIC | 7.36% |
ROA(3y)4.53%
ROA(5y)3.46%
ROE(3y)9.75%
ROE(5y)7.37%
ROIC(3y)6.8%
ROIC(5y)6.65%
1.3 Margins
- DIV's Profit Margin of 43.18% is amongst the best of the industry. DIV outperforms 100.00% of its industry peers.
- In the last couple of years the Profit Margin of DIV has declined.
- Looking at the Operating Margin, with a value of 89.81%, DIV belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
- In the last couple of years the Operating Margin of DIV has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 89.81% | ||
| PM (TTM) | 43.18% | ||
| GM | N/A |
OM growth 3Y0.39%
OM growth 5Y0.76%
PM growth 3Y-13.41%
PM growth 5Y-2.33%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so DIV is destroying value.
- DIV has more shares outstanding than it did 1 year ago.
- DIV has more shares outstanding than it did 5 years ago.
- The debt/assets ratio for DIV has been reduced compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 1.45, we must say that DIV is in the distress zone and has some risk of bankruptcy.
- The Altman-Z score of DIV (1.45) is comparable to the rest of the industry.
- DIV has a Debt/Equity ratio of 0.98. This is a neutral value indicating DIV is somewhat dependend on debt financing.
- DIV has a Debt to Equity ratio of 0.98. This is comparable to the rest of the industry: DIV outperforms 42.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.98 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.45 |
ROIC/WACC0.87
WACC8.42%
2.3 Liquidity
- DIV has a Current Ratio of 0.79. This is a bad value and indicates that DIV is not financially healthy enough and could expect problems in meeting its short term obligations.
- DIV has a worse Current ratio (0.79) than 84.21% of its industry peers.
- A Quick Ratio of 0.79 indicates that DIV may have some problems paying its short term obligations.
- DIV has a Quick ratio (0.79) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.79 |
3. Growth
3.1 Past
- DIV shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -15.00%.
- Measured over the past 5 years, DIV shows a small growth in Earnings Per Share. The EPS has been growing by 2.71% on average per year.
- DIV shows a small growth in Revenue. In the last year, the Revenue has grown by 6.88%.
- DIV shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 16.37% yearly.
EPS 1Y (TTM)-15%
EPS 3Y-3.85%
EPS 5Y2.71%
EPS Q2Q%25%
Revenue 1Y (TTM)6.88%
Revenue growth 3Y20.35%
Revenue growth 5Y16.37%
Sales Q2Q%13.44%
3.2 Future
- The Earnings Per Share is expected to grow by 13.23% on average over the next years. This is quite good.
- DIV is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.94% yearly.
EPS Next Y30.46%
EPS Next 2Y19.62%
EPS Next 3Y13.23%
EPS Next 5YN/A
Revenue Next Year11.28%
Revenue Next 2Y10.68%
Revenue Next 3Y8.28%
Revenue Next 5Y2.94%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 22.88, which indicates a rather expensive current valuation of DIV.
- Based on the Price/Earnings ratio, DIV is valued a bit cheaper than the industry average as 63.16% of the companies are valued more expensively.
- When comparing the Price/Earnings ratio of DIV to the average of the S&P500 Index (28.82), we can say DIV is valued slightly cheaper.
- With a Price/Forward Earnings ratio of 16.99, DIV is valued correctly.
- Based on the Price/Forward Earnings ratio, DIV is valued a bit cheaper than the industry average as 68.42% of the companies are valued more expensively.
- DIV's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.95.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.88 | ||
| Fwd PE | 16.99 |
4.2 Price Multiples
- DIV's Enterprise Value to EBITDA ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 15.38 |
4.3 Compensation for Growth
- DIV's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- A more expensive valuation may be justified as DIV's earnings are expected to grow with 13.23% in the coming years.
PEG (NY)0.75
PEG (5Y)8.45
EPS Next 2Y19.62%
EPS Next 3Y13.23%
5. Dividend
5.1 Amount
- DIV has a Yearly Dividend Yield of 7.33%, which is a nice return.
- DIV's Dividend Yield is rather good when compared to the industry average which is at 2.62. DIV pays more dividend than 89.47% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, DIV pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.33% |
5.2 History
- The dividend of DIV has a limited annual growth rate of 4.62%.
- DIV has paid a dividend for at least 10 years, which is a reliable track record.
- DIV has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)4.62%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
- 125.97% of the earnings are spent on dividend by DIV. This is not a sustainable payout ratio.
- DIV's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP125.97%
EPS Next 2Y19.62%
EPS Next 3Y13.23%
DIVERSIFIED ROYALTY CORP / DIV.CA FAQ
What is the fundamental rating for DIV stock?
ChartMill assigns a fundamental rating of 4 / 10 to DIV.CA.
Can you provide the valuation status for DIVERSIFIED ROYALTY CORP?
ChartMill assigns a valuation rating of 4 / 10 to DIVERSIFIED ROYALTY CORP (DIV.CA). This can be considered as Fairly Valued.
How profitable is DIVERSIFIED ROYALTY CORP (DIV.CA) stock?
DIVERSIFIED ROYALTY CORP (DIV.CA) has a profitability rating of 5 / 10.
What is the financial health of DIVERSIFIED ROYALTY CORP (DIV.CA) stock?
The financial health rating of DIVERSIFIED ROYALTY CORP (DIV.CA) is 1 / 10.
Can you provide the dividend sustainability for DIV stock?
The dividend rating of DIVERSIFIED ROYALTY CORP (DIV.CA) is 7 / 10 and the dividend payout ratio is 125.97%.