Canada's Diversified Royalty Q1 adjusted revenue rises 11%

Diversified Royalty

15/05/2026 02:59

Overview

Canada multi-royalty firm's Q1 adjusted revenue rose 11% yr/yr

Distributable cash for Q1 increased 10% from prior year

Net income declined due to higher expenses and changes in royalty structures

Outlook

Company says 33.3% Sutton royalty relief will continue throughout 2026

AIR MILES begins 10-year fixed annual royalty payment of $3.9 mln, growing 2.42% per year from 2027

BarBurrito royalty grows at 4% per year through March 2030; Cheba Hut royalty increases at minimum 3.5% annually

Result Drivers

ORGANIC GROWTH SLOWS - Mr. Lube + Tires and Oxford posted positive same-store-sales growth, but at reduced rates compared to prior year, with Mr. Lube + Tires impacted by unseasonal weather

NEW ROYALTY STREAMS - Revenue growth was supported by the start of a higher fixed AIR MILES royalty, incremental royalties from new BarBurrito locations, and the addition of Cheba Hut

SUTTON ROYALTY RELIEF - Revenue from Sutton declined due to a 33.3% royalty relief, continuing a trend from the prior quarter

Company press release: ID:nGNXc5Mg77

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q1 Adjusted Revenue
C$18.84 mln


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

The average consensus recommendation for the entertainment production peer group is "buy"

Wall Street's median 12-month price target for Diversified Royalty Corp is C$4.50, about 4.2% above its May 14 closing price of C$4.32

The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 17 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)