Gold Royalty Companies Report A Solid First Quarter On Higher Metal Prices

We like gold royalty companies here at U.S. Global Investors, and in the first quarter of 2020, the “big three” royalty names—Wheaton Precious Metals WPM, Franco-Nevada FNV, and Royal Gold RGLD—collectively generated a remarkable $402 million in positive free cash flow.

(Click on image to enlarge)

"Big three" Royalty names generated $400 million in free cash flow in Q1

 

Looking ahead, Raymond James analysts project Franco-Nevada delivering earnings per share (EPS) of $1.91, up from $1.82 in 2019. If Bank of America is right and the price of gold rises to $3,000 an ounce in the next 18 months, Franco’s EPS could be as much as $2.29, according to Raymond James.

As for Royal Gold, Raymond James rates the company as Outperform, seeing EPS of $2.90 this year, up from $1.48 last year. The company’s “high-margin metal sales” can be expanded with “minimal” general and administrative costs, analysts Brian MacArthur and Chris Law write, adding that Royal Gold has a “high-quality, diversified asset base in lower-risk jurisdictions, as well as a flexible balance sheet to support future investments and a growing dividend.”

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The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. A basis point, or bp, is a common unit of measure ...

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