High Dividend 50: Diversified Royalty Corp.

Published on November 7th, 2025 by Felix Martinez

High-yield stocks pay out dividends that are significantly higher than the market average. For example, the S&P 500’s current yield is only ~1.2%.

High-yield stocks can be particularly beneficial in supplementing income after retirement. A $120,000 investment in stocks with an average dividend yield of 5% creates an average of $500 a month in dividends.

Diversified Royalty Corp. (BEVFF) is part of our ‘High Dividend 50’ series, which covers the 50 highest-yielding stocks in the Sure Analysis Research Database.

We have created a spreadsheet of stocks (and closely related REITs, MLPs, etc.) with dividend yields of 5% or more.

You can download your free full list of all securities with 5%+ yields (along with important financial metrics such as dividend yield and payout ratio) by clicking on the link below:

Next on our list of high-dividend stocks to review is Diversified Royalty Corp. (BEVFF).

Business Overview

Diversified Royalty Corporation is a Canadian-based company that acquires royalties from established multi-location businesses and franchisors across North America. Its portfolio includes well-known brands such as Mr. Lube, AIR MILES, Sutton, Mr. Mikes, Nurse Next Door, and Oxford Learning Centers.

Originally operating as BENEV Capital, the company rebranded as Diversified Royalty Corporation in 2014 to better reflect its focus on acquiring stable, growing royalty streams across diverse industries. The company’s strategy centers on generating predictable, recurring revenue by partnering with proven, scalable franchise systems.

Diversified Royalty has built a strong base of Canadian royalty partners and is now expanding into the U.S. market. Its first American acquisition was Stratus Building Solutions—a leading franchisor in commercial cleaning and building maintenance with a presence across North America. The global commercial cleaning sector has grown steadily, averaging 5.8% annual growth between 2015 and 2022, and is projected to continue expanding at roughly 6.7% per year through 2030.

Source: Investor Relations

The company reported strong financial results for the second quarter of 2025, with continued growth across its portfolio of royalty partners. Revenue rose 6.4% year over year to $17.8 million in Q2 and $33.5 million for the first half of 2025. Adjusted revenue reached $19.2 million for the quarter, driven by solid same-store sales growth from Mr. Lube + Tires (11.3%) and Oxford Learning Centres (6.5%), as well as contributions from five new Mr. Lube + Tires locations and the addition of Cheba Hut, DIV’s ninth royalty partner and second U.S.-based brand. Distributable cash increased 9.3% to $12.7 million, while the payout ratio improved to 83%, reflecting stronger cash generation.

The company’s diverse royalty portfolio demonstrated consistent organic growth, averaging 5.5% in Q2. Most brands performed well, including steady contributions from Stratus, Nurse Next Door, and BarBurrito. However, AIR MILES continued to experience weaker results, and Sutton maintained its 20% royalty deferral through year-end 2025. Net income for the quarter rose to $9.0 million from $8.2 million a year earlier, supported by higher adjusted revenues and lower administrative costs.

CEO Sean Morrison highlighted that Q2 2025 marked DIV’s best quarter ever for adjusted revenue, underscoring the strength of its diversified model. The acquisition of Cheba Hut expands DIV’s footprint in the U.S. market, while the milestone opening of Mr. Mikes’ 50th location demonstrates continued brand growth. Moving forward, Diversified Royalty aims to generate steady, predictable cash flows through further royalty acquisitions and sustained performance across its portfolio, supporting stable monthly dividends and long-term shareholder value.

Growth Prospects

The company has built a steady growth record by expanding its portfolio of royalty streams from established multi-location businesses. From 2015 to 2019, earnings per share (EPS) grew consistently through acquisitions and strong results from core partners like Mr. Lube and Sutton. Even during the COVID-19 downturn in 2020, when certain sectors such as food service and education were disrupted, the company’s fixed-payment partners helped maintain stable cash flow.

The business rebounded sharply in 2021 as economic conditions improved, adding new royalty streams, such as Nurse Next Door, and benefiting from recovery across consumer-focused brands.

Looking ahead, growth is expected to continue but at a slower pace. Modest contractual increases under existing royalty agreements, combined with new contributions from recent additions such as Cheba Hut and Stratus, should support incremental earnings growth.

However, rising interest costs and uneven performance among mature brands could limit EPS growth to around 1% annually. Still, DIV’s diversified portfolio, recurring royalty structure, and focus on acquiring stable, accretive royalties position the company for sustainable long-term cash generation and continued dividend stability.

Competitive Advantages & Recession Performance

Diversified Royalty Corp. benefits from a unique and resilient business model that provides steady, recurring revenue through long-term royalty agreements with established, multi-location brands. By owning trademarks and collecting royalties from proven operators like Mr. Lube, Nurse Next Door, and Oxford Learning Centres, the company generates predictable cash flow regardless of underlying operating costs or inflationary pressures.

Its portfolio diversification across industries—automotive, education, healthcare, and food service—reduces dependence on any single sector and helps smooth out volatility. Additionally, fixed-rate and inflation-linked royalty structures provide partial protection against economic slowdowns and rising interest rates.

During economic downturns, DIV’s defensive positioning has proven effective. The company’s cash flows remained relatively stable even through the 2020 COVID-19 recession, as essential service brands like Mr. Lube and Nurse Next Door offset declines from more cyclical partners in dining and education. Its asset-light model and focus on franchisors with proven customer loyalty and recurring demand allow it to maintain profitability during challenging periods.

While some partners may experience temporary weakness in recessions, the company’s contractual royalties and diversification help preserve dividend stability and long-term shareholder value.

Dividend Analysis

Unlike many companies that cut dividends during the 2020–2021 pandemic, Diversified Royalty Corp. (BEVFF) maintained its payout and recently raised its dividend by 2%, offering an attractive yield of about 7.9%. However, the dividend has remained mostly unchanged over the past six years.

The company’s payout ratio stands at roughly 100%, leaving limited room for error given its moderate debt levels. As a result, the dividend’s safety margin is thin and could face pressure in the event of another economic downturn.

From a valuation standpoint, BEVFF trades around 12.7 times earnings—higher than its estimated fair value of 10 times earnings—suggesting potential downside if the market re-rates the stock. Assuming 1% annual EPS growth, the 7.9% dividend yield, and a -4.3% annualized loss from multiple compression, the stock could deliver an estimated 4.6% average annual total return over the next five years. This makes Diversified Royalty an appealing choice for income-focused investors seeking high yield and steady, long-term cash flow.

Final Thoughts

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