Diversified Royalty Corp. acquires royalties from multi-location businesses and franchisors in North America. While the company boasts a strong gross margin of 100% and a solid EBITDA margin of 49.3%, its low return on equity (1.0%) and return on assets (0.3%) raise concerns about profitability. Additionally, a current ratio of 0.49 indicates potential liquidity issues, compounded by a high debt-to-equity ratio of 2.12, suggesting significant leverage. Despite high margins, the overall financial health score of 30/100 reflects underlying risks that investors should consider.
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Debt of $639.7M is 46.7x the company's cash position of $13.7M.
Revenue growing at 14.8% YoY, outpacing typical market growth rates.
Exceptional gross margin of 100.0% indicates strong pricing power and competitive moat.
Operating margin of 72.2% demonstrates excellent operational efficiency.
Excellent operating cash flow margin of 50.9% indicates high-quality earnings.
Operating cash flow of $38.9M exceeds net income by 28%, indicating high-quality earnings with strong cash conversion.
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Based on 2026-Q2 (June 30, 2026)