Bigger PictureDIV is relatively new (September 2014 beginnings), picking up the Franworks royalty in October 2014, the Sutton Realty royalty in June 2015 and the Mr. Lube royalty in July 2015. The s/p steadily went up from September 2014 through mid June 2015 (from $2.43 to $3.08). Since mid June, the s/p steadily went down from $3.08 to approaching $2. Yet the dividend rate has steadily increased throughout. The market seems to believe the dividend isn't sustainable, in spite of the excellent track record of the dividend and the diversification into three revenue streams since the September 2014 beginnings.
At first blush, one might simply blame the overall market. It is true that since mid June 2015, the TSX went down 17.67% (from 14,897 to 12,265). Clearly the overall market has been the biggest problem for DIV notwithstanding the consistent dividend payments. However, during this same window of time (since mid June 2015), DIV went down 30% (from $3.08 to $2.04 (33.77%). It has underperformed the TSX composite by a pretty wide margin since June 2015. Hence my conclusion the market somehow doesn't trust the DIV dividend is sustainable. Adding more royalty streams doesn't seem to factor into Mr. Market's opinion. I really don't get it. DIV isn't a speculative buy--the royalty streams are proven. It seems like an incredibly good buying opportunity at today's prices (with the s/p dropping, the dividend yield is approaching 11%). But then, what does Mr. Market know that I don't? We say the market is always right, but at times it seems the market is just as ignorant as I am. I bought more today.