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Decisive Dividend Corp is a buy, Echelon says

Echelon Capital Markets analyst Mike Stevens has launched coverage of Decisive Dividend Corp (Decisive Dividend Corp Stock Quote, Chart, News, Analysts, Financials TSXV:DE).

In a report to clients August 18, Stevens initiated coverage of DE with a “Buy” rating and a one-year price target of $10.75, representing a return of 45 per cent at the time of publication.

Founded in 2012, Kelowna-based Decisive Dividend Corp acquires manufacturing-based businesses in diverse spaces such as wood stoves, truck components and road maintenance.

Stevens says the company has a winning and repeatable M&A strategy.

“Decisive’s disciplined buy, build, and hold M&A strategy has acquired ~$97M in enterprise value (EV) across 11 manufacturing businesses at immediately accretive acquisition multiples (average of 3.9x EV/EBITDA) before seeking to reinvigorate growth through strategic investments. The Company’s founder-friendly core tenets and access to capital have favourably positioned Decisive as an attractive acquirer,” the analyst said. “This, coupled with surging macro tailwinds, as ~56% of Canada’s baby boomer business owners plan to exit over the next five years (representing $1.5T+ worth of assets) (CFIB), helps forge a rich pipeline of opportunities to flow for many years to come. With our headline PT derived from a strictly organic forecast outlook (i.e., assuming no further acquisitions), our more plausible M&A Scenarios point to current per share valuations of $12.63/$14.53 across our Base/Bull cases, implying considerable upside beyond our PT.”

Stevens thinks DE will post Adjusted EBITDA of $24.4-million on revenue of $139.4-million in fiscal 2023. He expects those numbers will improve to EBITDA of $32.2-million on a topline of $168.2-million the following year.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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