In Tuesday’s buying and selling, 77 NYSE shares hit new 52-week highs in comparison with 22 hitting new lows. Over on Nasdaq, the brand new 52-week lows outnumbered the highs, 135 to 104.
Among the many 22 new 52-week lows on the NYSE on Tuesday was Columbus-based funding supervisor Diamond Hill Funding Group (DHIL), a small-cap with AUMA (belongings beneath administration and advisement) of $32.4 billion as of Sept. 30.
I first got here throughout Diamond Hill by means of Harvest Trade, a digital promoting platform for funding corporations to disseminate their thought management and funding theses. Every so often, Diamond Hill would submit an article that me, and so it entered my consciousness.
Whereas $32.4 billion is an affordable quantity of belongings beneath administration for any funding supervisor, in comparison with bigger independents like Artisan Companions Asset Administration (APAM), whose AUM as of Oct. 31 was $183 billion, it’s a relative pittance.
Essentially the most vital headwind a agency like Diamond Hill faces is reducing by means of the noise and rising its AUM, given the aggressive panorama.
On Tuesday, DHIL inventory hit a brand new 52-week low of $114.48, its thirtieth new low of the previous 12 months. Additional, apart from its March 2020 low of $75, the corporate’s shares are at their lowest degree since November 2013.
The inventory’s degree begs the query: a possibility or a purple flag? I consider it’s the previous. Right here’s why.
Earlier than I get into different the reason why DHIL inventory could possibly be a buy-on-the-dip alternative, the $4-a-share particular dividend introduced alongside Diamond Hill’s Q3 2025 outcomes on Oct. 30 actually caught my consideration.
I like particular dividends. Lots of people don’t. Their rationale is that it attracts short-term traders trying to scoop up the dividend after which transfer on. Like something in life, you’re going to have people who find themselves into short-termism. I’m not a type of individuals.
Particular dividends are a superb capital allocation instrument, on their very own or along with the common dividend, paid out primarily based on money circulate at any given time. It exhibits that administration is considering shareholders.
In Diamond Hill’s case, it pays a hard and fast quarterly dividend of $1.50 per share, or $6 yearly. It’s been doing this since March 2022. Earlier than that, it paid $1 per quarter.
Previously 5 years, it’s paid out $28 a share in quarterly dividends, and $27 a share in particular dividends ($4 in December 2025, $4 in December 2022, and $19 in December 2021). That’s a median annual whole payout of $11 per share.
Are you aware of the idea of Shareholder Yield? It combines dividend yield with buyback yield to get an organization’s whole payout to shareholders. This Morningstar article does an excellent job explaining the professionals and cons of shareholder yield.
In 2022, the final time Diamond Hill paid a particular dividend, the corporate paid out $30.7 million in dividends and repurchased $42.2 million of its shares, in accordance with S&P International Market Intelligence.
Primarily based on 3.01 million shares excellent as of Dec. 31, 2022, and a share value of $185.02 on the finish of 2022, Diamond Hill had a market cap of $556.9 million. That gave it a shareholder yield of 13.1% on the time.
Not too shabby.
Diamond Hill’s inventory is down almost 26% in 2025, 31% over the previous 12 months, and 25% over the previous 5 years.
If not for dividends and share repurchases, a shareholder’s whole return could be underwater. Because it stands, DHIL’s five-year whole return is 3.01%, significantly lower than the 14.8% whole return for the SPDR S&P 500 ETF (SPY).
Clearly, reversion to the imply wants to realize traction for long-time shareholders. The query is, will it?
Between 2012 and 2018, Diamond Hill’s annual income grew for six consecutive years, from $66.7 million to $145.6 million. Since then, it’s had 4 down years and two up, with 2025 but to be accomplished. As of Q3 2025, revenues had been down 1%, so a fifth yr decrease seems possible.
So, between 2012 and 2024, its compound annual income progress price was 7.1%. That’s really not too unhealthy for an funding supervisor. I referenced Artisan Companions earlier. Its income CAGR over the identical interval is 6.8%, 3o foundation factors decrease.
Diamond Hill has been reworking the forms of belongings it manages over the previous three years. In 2022, fastened revenue accounted for simply 7.9% of its $26.6 billion beneath administration. In 2024, that was as much as 19.4% of $31.9 billion. On the finish of Q3, it was 28.1%.
It’s now including $1 billion in fixed-income belongings beneath administration each 4 or 5 months. The diversification into fixed-income continues to realize traction.
The difficulty that’s hurting Diamond Hill’s share value isn’t income, it’s earnings. The corporate’s gross revenue margin in 2021 and 2022 was over 53%; its EBIT (earnings earlier than curiosity and taxes) margin was almost 42%. Within the trailing 12 months ended Sept. 30, the gross revenue and EBIT margins had been 45.8% and 29.3%, respectively. Significantly decrease than earlier than.
The excellent news is that the margins have stabilized.
In the course of the third quarter, it transformed its Giant Cap Concentrated mutual fund to an ETF. The actively managed Diamond Hill Giant Cap Concentrated ETF (DHLX) goals to put money into 20 or 30 large-cap shares. After the conversion, Diamond Hill has 12 mutual funds. I’m positive Diamond Hill will convert a number of extra within the months forward.
Mixed with the expansion in fastened revenue, I see a wholesome enterprise, however one out of vogue with traders. Aggressive traders must take a better look. The worm could possibly be prepared to show.
On the date of publication, Will Ashworth didn’t have (both straight or not directly) positions in any of the securities talked about on this article. All data and information on this article is solely for informational functions. This text was initially printed on Barchart.com
