TD Upgrade TD upgraded the stock yesterday to "hold" from "reduce". They sounded pretty positive on the company, pointing out the company's cost rationalization success. They raised estimates for 2013 and 2014, and show the dividend payout ratio at 44% (near the low end of management's 40-60% target range). This suggests a pretty safe dividend, and lots of excess cash flow for debt reduction.
The only negative point TD has is on the valuation, which they think is not cheap relative to peers, and so they only have a "hold" rating. I think their analysis here is a bit shoddy. They have not compared DGI on a free cash flow basis (only on a EBITDA basis, probably because he doesn't want to do the work of calculating free cash flow for a bunch of companies). DGI is only trading at 3x free cash flow. On this basis, I am sure DGI would look extremely cheap relative to peers.