Published on April 15th, 2026 by Nathan Parsh
Diversified Royalty Corporation (BEVFF) has two appealing investment characteristics:
#1: It is a high yield stock based on its 6.7% dividend yield.
Related: List of 5%+ yielding stocks.
#2: It pays dividends monthly instead of quarterly.
Related: List of monthly dividend stocks.
You can download our full Excel spreadsheet of all 118 monthly dividend stocks (along with metrics that matter like dividend yield and payout ratio) by clicking on the link below:
Diversified Royalty Corporation’s above characteristics, namely its high yield and monthly dividend payments, make it an attractive candidate for income-oriented investors.
But there’s more to the company than just these factors. Keep reading this article to learn more about Diversified Royalty Corporation.
Business Overview
Diversified Royalty Corporation, based in Canada, is a multi-royalty corporation that acquires royalties from multi-location businesses and franchisors in North America. The company owns the trademarks of Mr. Lube, AIR MILES, Sutton, Mr. Mikes, Nurse Next Door, and Oxford Learning Centers.
The company, formerly known as BENEV Capital, changed its name to Diversified Royalty Corporation in September 2014. Its objective is to acquire predictable, growing royalty streams from diverse multi-location businesses and franchisors.
Diversified Royalty Corporation has been building a diversified portfolio of royalties from multi-locations and franchisors in Canada. It also intends to expand its business model in the U.S. To this end, the company has been promoting its business model at various International Franchise Association events in the U.S. Its expansion efforts bore fruit with Stratus, the company’s first royalty transaction in the U.S.
Stratus is an industry-leading franchisor in commercial cleaning and building maintenance, offering both master franchises and turn-key janitorial unit franchisees across North America. The global commercial cleaning industry is immense and grew by 5.8% annually between 2015 and 2022. It is expected to grow 6.4% per year from 2025 to 2030.
Source: Investor Relations
Growth Prospects
Diversified Royalty Corporation has exhibited a somewhat volatile and inconsistent performance record, partly due to the effect of the gyrations of the exchange rate between the Canadian dollar and the U.S. dollar. Nevertheless, the company has grown its average earnings-per-share by 9.6% annually, from $0.07 in 2016 to $0.15 in 2025. However, this growth rate has deaccleretered to 0% when looking at just the last five years.
Diversified Royalty Corporation has made several acquisitions in order to help grow the business.
In 2022, the company made a royalty acquisition of Stratus that has proven to be a significant growth driver for the company. Stratus expects to have up to 150 Master Franchisees across the U.S. and Canada over the next 5-10 years.
More recently, the company added Cheba Hut in 2025.
Source: Investor Presentation
Given Diversified Royalty Corporation’s historical growth record and expected business acceleration thanks to acquisitions, we expect 1.0% average annual growth of earnings per share over the next five years.
Dividend & Valuation Analysis
In contrast to many companies that cut their dividends in 2020-2021 due to the coronavirus crisis, Diversified Royalty Corporation defended its dividend during that downturn. In addition, the company’s dividend has a compound annual growth rate of 5.6% over the last five years.
However, it is essential to note that the company has kept its dividend unchanged for much of the last decade. During this period, it has marginally raised its dividend in CAD a few times, but the strengthening of the USD versus CAD has offset these raises.
Moreover, Diversified Royalty Corporation often has a proforma payout ratio of 100%, which is very high. The expected payout ratio for 2026 is even higher at 140%. Overall, due to the remarkably high payout ratio and the material debt load of Diversified Royalty Corporation, the dividend has a thin margin of safety and may be cut whenever the next recession occurs.
In reference to the valuation, Diversified Royalty Corporation is trading for 20.9x expected EPS for the year. Given the company’s decent growth prospects, we assume a fair price-to-earnings ratio of 15.0 for the stock. Therefore, the current price-to-earnings ratio is much higher than our assumed fair price-to-earnings ratio. Therefore, total annual returns could be reduced by 6.4% through 2031 due to multiple compression.
Taking into account the 1% annual growth of earnings per share, the 6.7% dividend, and a 6.4% annualized headwind from valuation, Diversified Royalty Corporation could offer a 1.9% average annual total return over the next five years. This is a fairly low rate of potential return.
Final Thoughts
Diversified Royalty Corporation has an attractive business model. It does its best to add reliable and growing royalty revenues to its income stream, aiming to offer a rising income stream to its shareholders.
Moreover, the company has decent growth prospects ahead as it uses acquisitions to grow its business.
The main caveats are Diversified Royalty Corporation’s sensitivity to recessions and very high dividend payout ratio. Additionally, the stock has exceptionally low trading volume (less than 8,000 shares traded most days), which makes it hard to purchase or sell a large position in this stock.
While the dividend yield is attractive, total return prospects are low, earning shares of Diversified Royalty Corporation a hold rating.
Don’t miss the resources below for more monthly dividend stock investing research.
- The Monthly Dividend Stocks List
- 20 Highest Yielding Monthly Dividend Stocks
- 10 Cheapest Monthly Dividend Stocks
- 10 Safest Monthly Dividend Stocks
- 3 Top ‘Hold Forever’ Monthly Dividend Stocks
And see the resources below for more compelling investment ideas for dividend growth stocks and/or high-yield investment securities.
- Dividend Kings: 50+ years of rising dividends
- Dividend Champions: 25+ years of rising dividends
- Dividend Aristocrats: 25+ years of rising dividends and in the S&P 500
- Dividend Achievers: 10+ years of rising dividends and in the NASDAQ
- High Dividend Stocks: 4%+ dividend yields
- Blue Chip Stock: Kings, Aristocrats, and Achievers
- MLPs: List of MLPs and more
- REITs: List of REITs and more
- BDCs: List of BDCs and more