Raymond James Have been keeping an eye on this company and finally initiated a position this week. Surprised that the SP would be down today given this afternoon's NR. GLTA
Raymond James analyst Steve Hansen sees Decisive Dividend Corp. “well-positioned to deliver outsized growth,” citing its “unique competitive position, advanced M&A pipeline, and key secular tailwind.”
“While still early innings, we believe Decisive is in the midst of a long-term strategic growth plan that will benefit from robust acquisitive & organic growth over the next 5+ years,” he said. “We also see the opportunity for significant revenue and cost synergies, particularly as Decisive builds clear clusters of expertise over time.”
In a research report released Tuesday titled Buy, Build & Prosper: Accumulating Niche Enterprises to Power Sustainable Divvy, Mr. Hansen initiated coverage of the Kelowna, B.C.-based acquisition-oriented company with an “outperform” rating.
“Decisive is developing a solid track record for its ability to grow the businesses it acquires ... The company has posted almost 30-per-cnet consolidated organic growth across its platform over the past two years (post COVID),” he said. “While the source of growth varies by subsidiary, key strategies have included: 1) strategic investment into new production capacity; 2) R&D investment into new product development; 3) cross-selling across common customers/channels; and 4) installing new professional management (C-Suite, sales).
“While DE’s current subsidiaries are broadly diversified across multiple end-markets, we expect the company to develop core platforms of expertise over time that should allow for improved synergy extraction (revenue & cost). To this end, we already point to an evolving platform in the hearth sector (Blaze King & ACR) and industrial wear parts (Unicast/Micon/Procore).”
Mr. Hansen thinks Decisive’s management appears “laser focused” on creating shareholder value through “disciplined accretive growth.”
“In other words, they eschew growth-for-the-sake-of-growth and instead focus on KPIs such as earnings/share, EBITDA/share, and FCF/share—all measures that help measure/protect shareholder interests, in our view. Strong competitive positions, high returns on invested capital, and low capital intensity are all complementary factors that also underpin this strategy,” he added.
The analyst set a target of $10.50 per share, representing a 35-per-cent total return from its Monday closing price. The average on the Street is $10.63.