Diversified Royalty (TSE:DIV) Shares Down 9.7% - Here's Why

Key Points

• Diversified Royalty shares fell 9.7% to about C$4.17, with trading volume surging 483% above the daily average.
• Despite the sell-off, analysts remain positive: all four covering analysts rate the stock a Buy, with a consensus price target of C$5.35.
• The company reported quarterly EPS of C$0.02 on C$19.48 million in revenue and declared a monthly dividend of C$0.0238 per share, implying a 6.9% annualized yield; however, its payout ratio is high at 137.5%.

Shares of Diversified Royalty Corp. (TSE:DIV - Get Free Report) were down 9.7% on Thursday . The stock traded as low as C$4.04 and last traded at C$4.17. Approximately 2,483,779 shares were traded during mid-day trading, an increase of 483% from the average daily volume of 425,931 shares. The stock had previously closed at C$4.62.

Analyst Upgrades and Downgrades

Several analysts have commented on the stock. Raymond James Financial lifted their target price on shares of Diversified Royalty from C$4.70 to C$5.00 and gave the stock an "outperform" rating in a research note on Thursday, July 9th. Desjardins increased their price target on Diversified Royalty from C$4.75 to C$5.00 and gave the stock a "buy" rating in a research note on Tuesday, July 7th. ATB Cormark Capital Markets decreased their price objective on Diversified Royalty from C$7.50 to C$7.25 and set an "outperform" rating on the stock in a report on Tuesday, July 7th. Finally, Canaccord Genuity Group lifted their price objective on Diversified Royalty from C$4.75 to C$5.50 and gave the company a "buy" rating in a research report on Wednesday, May 20th. Four analysts have rated the stock with a Buy rating, According to data from MarketBeat.com, Diversified Royalty presently has a consensus rating of "Buy" and a consensus target price of C$5.35.

Diversified Royalty Price Performance

The company has a 50 day simple moving average of C$4.66 and a 200 day simple moving average of C$4.39. The company has a market capitalization of C$768.77 million, a price-to-earnings ratio of 20.55 and a beta of 1.11. The company has a quick ratio of 1.74, a current ratio of 2.84 and a debt-to-equity ratio of 103.05.

Diversified Royalty (TSE:DIV - Get Free Report) last announced its quarterly earnings results on Wednesday, August 12th. The company reported C$0.02 earnings per share for the quarter. The firm had revenue of C$19.48 million for the quarter. Diversified Royalty had a net margin of 49.91% and a return on equity of 12.54%. As a group, research analysts predict that Diversified Royalty Corp. will post 0.2 EPS for the current year.

Diversified Royalty Dividend Announcement

The company also recently declared a monthly dividend, which will be paid on Monday, August 31st. Investors of record on Monday, August 31st will be paid a dividend of $0.0238 per share. The ex-dividend date of this dividend is Friday, August 14th. This represents a c) annualized dividend and a yield of 6.9%. Diversified Royalty's payout ratio is 137.50%.

Insider Activity

In other news, insider Greg Gutmanis sold 30,000 shares of the firm's stock in a transaction dated Friday, May 29th. The stock was sold at an average price of C$4.85, for a total transaction of C$145,500.00. Following the completion of the sale, the insider directly owned 204,185 shares in the company, valued at C$990,297.25. This trade represents a 12.81% decrease in their ownership of the stock. Also, Director Johnny Ciampi sold 147,004 shares of Diversified Royalty stock in a transaction dated Monday, June 8th. The stock was sold at an average price of C$4.77, for a total value of C$701,209.08. Following the sale, the director directly owned 12,767 shares in the company, valued at approximately C$60,898.59. The trade was a 92.01% decrease in their ownership of the stock. Insiders have sold 330,000 shares of company stock valued at $1,576,500 over the last 90 days. Insiders own 0.52% of the company's stock.

Diversified Royalty Company Profile

Diversified Royalty Corp is a multi-royalty company. It is engaged in the business of acquiring royalties from multi-location businesses and franchisors in North America. As a part of the investment strategy, the firm always purchases trademarks of the companies it is going to acquire. The company gives its partners the benefit of full operational control of their business, participation in the growth of their company, and tax deductibility on royal payments. All of the company's operating revenues are earned from the receipt of royalties and management fees from its Royalty Partners.

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