Diversified Royalty (TSE:DIV) Sets New 12-Month Low - Should You Sell?

Key Points

• Diversified Royalty shares hit a new 52-week low of C$3.43 and were last quoted at C$3.51, below the C$4.07 50-day and C$4.28 200-day averages.
• Despite the decline, four analysts rate the stock Buy, with a consensus price target of C$5.25; recent target cuts lowered estimates to C$7.00 and C$4.75.
• The company declared an annualized dividend yield of 8.2%, but its 165.69% payout ratio exceeds reported earnings. Insiders also recently bought shares.

Diversified Royalty Corp. (TSE:DIV - Get Free Report)'s share price hit a new 52-week low during mid-day trading on Tuesday. The company traded as low as C$3.43 and last traded at C$3.51, with a volume of 262,485 shares trading hands. The stock had previously closed at C$3.62.

Analyst Upgrades and Downgrades

Several research analysts recently commented on DIV shares. ATB Cormark Capital Markets reduced their price target on Diversified Royalty from C$7.25 to C$7.00 and set an "outperform" rating for the company in a research report on Friday, August 14th. Desjardins lowered their price objective on shares of Diversified Royalty from C$5.00 to C$4.75 and set a "buy" rating on the stock in a research note on Friday, August 14th. Four investment analysts have rated the stock with a Buy rating. According to MarketBeat.com, Diversified Royalty currently has a consensus rating of "Buy" and an average price target of C$5.25.

Diversified Royalty Stock Performance

The company has a market capitalization of C$660.65 million, a price-to-earnings ratio of 20.59 and a beta of 0.90. The stock has a 50-day moving average price of C$4.07 and a 200-day moving average price of C$4.28. The company has a debt-to-equity ratio of 212.48, a current ratio of 0.49 and a quick ratio of 1.74.

Diversified Royalty (TSE:DIV - Get Free Report) last issued its earnings results on Saturday, November 7th. The company reported C$0.03 EPS for the quarter. The company had revenue of C$31.53 million during the quarter. Diversified Royalty had a return on equity of 10.39% and a net margin of 39.72%. As a group, analysts forecast that Diversified Royalty Corp. will post 0.20 earnings per share for the current year.

Diversified Royalty Announces Dividend

The firm also recently declared a monthly dividend, which will be paid on Monday, November 30th. Shareholders of record on Monday, November 30th will be issued a dividend of $0.0238 per share. The ex-dividend date of this dividend is Friday, November 13th. This represents a $0.29 annualized dividend and a yield of 8.2%. Diversified Royalty's dividend payout ratio (DPR) is currently 165.69%.

Insiders Place Their Bets

In related news, insider Sean Morrison acquired 12,626 shares of the firm's stock in a transaction on Friday, August 14th. The shares were purchased at an average cost of C$4.02 per share, for a total transaction of C$50,756.52. Following the completion of the acquisition, the insider directly owned 771,648 shares in the company, valued at approximately C$3,102,024.96. This trade represents a 1.66% increase in their ownership of the stock. Also, Director Johnny Ciampi acquired 100,000 shares of the firm's stock in a transaction on Friday, August 14th. The stock was bought at an average price of C$3.99 per share, for a total transaction of C$399,000.00. Following the completion of the acquisition, the director owned 112,767 shares of the company's stock, valued at approximately C$449,940.33. The trade was a 783.27% increase in their ownership of the stock. Insiders own 0.52% of the company's stock.

About Diversified Royalty

DIV is a multi-royalty corporation, engaged in the business of acquiring top-line royalties from well-managed multi-location businesses and franchisors in North America. DIV's objective is to acquire predictable, growing royalty streams from a diverse group of multi-location businesses and franchisors. DIV, through its subsidiary, Mr. Lube Canada Ltd., also operates the Mr. Lube + Tires franchisor business in Canada. Mr. Lube + Tires is the leading Canadian automotive service chain specializing in fast, drive-in drive-through, no-appointment-needed vehicle maintenance.

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