This analyst just raised his price target on Decisive Dividend Corp.

Beacon Securities analyst Russell Stanley says Decisive Dividend’s (Decisive Dividend Corporation Stock Quote, Chart, News, Analysts, Financials TSXV:DE) acquisition of Belgian hearth manufacturer Be Fire expands the company’s highest-return vertical, broadens its European footprint and should improve its payout ratio.

In a June 3 update, Stanley maintained his “Buy” rating on Decisive and raised his target price to $12.25 from $11.00 following the company’s $19.9-million cash acquisition of Be Fire.

“The transaction checks several boxes: expansion of DE’s highest return vertical, geographic revenue diversification, leadership continuity, and sufficient size on an attractive valuation to support meaningful reduction of the payout ratio,” Stanley said.

Be Fire manufactures wood-burning stoves, fireplaces and fireplace inserts in Belgium under the Jidé and Bodart & Gonay brands. Stanley said the acquisition strengthens Decisive’s hearth segment, its highest-return business, while giving it a larger presence in Continental Europe.

The acquisition was funded through Decisive’s revolving credit facility and recent $8-million private placement. Stanley noted the deal is the company’s largest acquisition to date and comes at less than five times Be Fire’s five-year average Adjusted EBITDA and six times trailing Adjusted EBITDA of $3.3-million.

The analyst said the addition of Be Fire should create growth opportunities across Decisive’s existing hearth businesses while providing leadership continuity, with Be Fire president Jean-Philippe Couasnard committed to remain for three years.

Stanley raised his fiscal 2027 Adjusted EBITDA forecast to $38.0-million from $34.0-million (Adjusted EBITDA of $38.0-million) and increased his valuation multiple to 9.5 times from 9.0 times. He now expects Decisive’s payout ratio to improve to 51% in fiscal 2027 from 69% in fiscal 2026.

Stanley said Decisive’s leverage remains manageable and the company retains additional capacity for future acquisitions.

Stanley expects Decisive to generate Adjusted EBITDA of $29.0-million on revenue of $165.0-million in fiscal 2026.

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