Should you hang on to your Decisive Dividend stock?

Decisive Dividend (Decisive Dividend Stock Quote, Chart, News, Analysts, Financials TSXV:DE) has extended the maturity of its $175-million revolving credit facility by 15 months to June 2028, a move Beacon Securities analyst Russell Stanley says supports the company’s long-term growth plans.

Stanley maintained his “Buy” rating and $9.00 target in a June 10 note.

“The facility remains interest-only until maturity and still features a $100M committed revolver, which had $39M available as of early May, plus a $75M accordion,” Stanley said. “The leverage covenant has also been relaxed (new max of 3.5x up from 3.25x, v. the reported 2.7x for Q1/25). The interest coverage ratio floor is still 1.5x v. 1.8x reported for Q1. The current effective rate on the facility is 6%, based on variable rates tiered based on DE’s leverage ratio, v. the 6.3% effective rate at the end of Q1. The lending syndicate includes National Bank, Royal Bank, and Fédération des caisses Desjardins du Québec.”

Stanley said Decisive Dividend’s management recently expressed confidence in completing acquisitions in fiscal 2025. The company is focused on adding Canadian producers in the natural resources sector, as well as U.S. and U.K. businesses that fit within its five existing verticals: industrials, hearth, wear parts, merchandising, and agriculture.

“The extension of the credit facility not only demonstrates DE’s creditworthiness, but it also provides added flexibility to support M&A activity,” he said.

Decisive Dividend now yields 7.1%, down from a peak of 10.4% in October 2024, as its share price continues to climb, Stanley said. A return to its March 2024 low yield of 5.0% would imply a 41% rally to over $10.80 per share. Matching Exchange Income Fund’s current 4.6% yield would require a 54% gain. The stock has outperformed EIF since late December, and that momentum appears to be holding. Stanley sees potential catalysts in upcoming Q2 results and future M&A activity, with long-term growth and acquisitions expected to support further dividend increases.

Stanley expects Decisive Dividend to generate $27-million in Adjusted EBITDA on $147-million in revenue in fiscal 2025. He forecasts those figures will improve to $31-million in EBITDA on $155-million in revenue in fiscal 2026.

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